By Steven Scheer
JERUSALEM (Reuters) – Israel’s government was split on Thursday over whether to make a regular transfer of funds to the Palestinian Authority in the occupied West Bank, adding to growing signs of strain in Prime Minister Benjamin Netanyahu’s right-wing coalition.
Defence Minister Yoav Gallant and Finance Minister Bezalel Smotrich were pulling in opposite directions over whether to release tax revenues collected by Israel on behalf of the Palestinian Authority following the deadly attack by hundreds of Hamas gunmen out of the Gaza Strip on Oct. 7.
The ultra-nationalist Smotrich has refused to release the funds, accusing the Palestinian Authority of supporting the “horrific massacres of the Nazi terror organisation Hamas”.
He has rejected an appeal by Defence Minister Yoav Gallant, who has called for the funds to be disbursed to help restore stability to the volatile West Bank where there has been a surge in violence since the Hamas attack on Oct. 7.
“This is clearly a problem for cohesive policy at the time of war,” said Gideon Rahat, senior fellow at the Israel Democracy Institute. “They are already thinking about the day after the war.”
The Western-backed Palestinian Authority exercises limited self-rule in parts of the Israeli-occupied West Bank and has no power in Gaza, where Islamist rival Hamas seized control in a brief civil war in 2007.
Palestinian President Mahmoud Abbas has said Gaza is facing “a war of genocide and massacres” and demanded an immediate halt to Israeli attacks and a release of prisoners. He has also condemned killing of civilians on both sides of the conflict.
Israel collects customs duties and other tax revenues in parts of the occupied West Bank where it exercises direct control and typically transfers them to the Palestinians monthly on the approval of the finance minister.
Together with aid from foreign donors, the funds, which were due to be released before the end of October, make up the bulk of public revenues for the PA and help pay for the salaries of state employees and other services in the West Bank.
A spokesperson for Gallant said disbursing the funds would help ensure stability while Israel was engaged in its war with Hamas in Gaza, where ground troops have been fighting for almost a week.
“The transfer of the funds is in our interest. We want to maintain stability in Judea and Samaria and not open another front there,” the spokesperson said, using a term often used by Israelis for the West Bank.
Netanyahu appeared at a press conference with Smotrich on Thursday but neither mentioned the issue and they left soon after making initial statements, only answering one question.
The cabinet is slated to discuss the issue again later on Thursday.
(Reporting by Steven Scheer. Additional reporting by Maytaal Angel, Editing by William Maclean)
