Finance Minister Bezalel Smotrich called on Prime Minister Benjamin Netanyahu on Wednesday to take steps against the Palestinian Authority (PA) following the unilateral recognition of Palestinian statehood by Norway, Ireland and Spain and the International Criminal Court (ICC)'s decision to pursue arrest warrants against Netanyahu and Defense Minister Yoav Gallant.
In one of these steps, Smotrich announced that he intends to stop transferring tax revenues to the PA — which Israel collects as part of the Paris Protocol signed between the sides in 1994 — and won't extend the indemnity to correspondent banks that transfer funds to banks in the West Bank.
Israel's Security Cabinet approved in January a framework for transferring the Palestinian Authority’s deducted tax revenues to Norway after Smotrich refused to deliver the funds, raising fears of the PA's collapse as a result.
The U.S. offered to transfer the money to a bank account in Norway, where it would accrue interest, while Israel would transfer the remaining funds to the PA.
Until the agreement was reached, the PA refused to withdraw the relative portion Israel was holding. Now, Smotrich has announced he considers the arrangement void and will stop transferring the funds entirely.
In a letter to Netanyahu, Smotrich wrote, "At the previous government meeting, I and many other ministers made an unequivocal demand to take severe measures against the Palestinian Authority for its unilateral actions against Israel, including its pursuit of unilateral recognition of statehood at the UN and through bilateral agreements with several countries, and the legal battle it's waging against the State of Israel in the international court at The Hauge to stop the war.
"After the discussion, you tasked a ministerial team, coordinated by the National Security Council (NSC), to formulate a recommended list of measures within 24 hours. As you know, since the government meeting, the antisemitic prosecutor at the ICC has published his decision to issue arrest warrants against you and the defense minister as part of a case filed by the Palestinian Authority.
"Let me remind you that I approached you two weeks ago and demanded the formulation of severe response measures. Unfortunately, the issue has dragged on, and some are apparently trying to sideline it."
"I don't intend to allow officials to dismiss the issue. There's urgency for an immediate response that will impose a significant cost on the Palestinian Authority for its actions and deter it and other countries," Smotrich concluded.
Smotrich also asked the premier to approve the immediate convening of the West Bank's Planning Administration to approve the construction of 10,000 housing units in the territory, including in Area E1; to approve a decision at Thursday's Cabinet meeting on establishing a settlement for every country that unilaterally recognizes a Palestinian state; to pass a decision to cancel the transfer of tax revenues to the Palestinian Authority; to promote a proposal to bolster settlements in the West Bank; and to permanently revoke all VIP permits for senior Palestinian Authority officials at all border crossings and impose additional economic sanctions on them and their families.