Israel withholds Palestinian funds after U.N. vote

JERUSALEM Sun Dec 2, 2012 8:31am EST

JERUSALEM (Reuters) - Israel said on Sunday it was withholding this month's transfer of tax revenues to the Palestinian Authority, after the United Nations' de facto recognition of a Palestinian state.

Under interim peace deals, which Israel says the Palestinians violated by unilaterally seeking an upgrade of their status at the United Nations, it collects about $100 million a month in duties on behalf of the authority.

But, Israeli officials said, the authority owes about $200 million to the Israel Electric Corporation, and that money will now be deducted from the tax transfers.

The cash-strapped authority, which exercises limited self-rule in the occupied West Bank, largely depends on the tax money to pay civil servants' salaries. Yasser Abed Rabbo, a senior Palestinian official, said Israel was guilty of "piracy and theft" by refusing to hand over the funds.

Israel has previously frozen payments to the body during times of heightened security and diplomatic tensions, provoking strong international criticism, such as when the U.N. cultural body UNESCO granted the Palestinians full membership a year ago.

"I do not intend this month to transfer the funds to the Palestinians. In the coming period I intend to use the money to deduct debts the Palestinian Authority owes to the Israel Electric Corporation and other bodies," Finance Minister Yuval Steinitz said on Israel Radio.

The U.N. victory for the Palestinians was a diplomatic setback for the United States and Israel, which were joined by only a handful of countries in voting against upgrading the Palestinians' observer status at the U.N. to "non-member state", like the Vatican, from "entity".

Hours after the U.N. vote, Israel said it was authorizing 3,000 new settler homes in the West Bank and East Jerusalem and expediting planning work for thousands more dwellings in a geographically sensitive area close to Jerusalem, which critics said would kill off Palestinian hopes of a viable state.

The United States said the expansion plan, which also drew strong European criticism, was counterproductive to the resumption of Israeli-Palestinian peace talks frozen since 2010.

(Reporting by Maayan Lubell; Writing by Jeffrey Heller; Editing by Pravin Char)

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Comments (13)
someone101 wrote:
An eye for an eye makes the whole world go blind..

Dec 02, 2012 6:55am EST  --  Report as abuse
There can now be no question that Netanyahu’s right-wing government wants war. It is determined to goad the Arabs of Palestine further and further by illegally expropriating their land and continuing the six year old blockade that denies the free access of food, medicines and essential supplies to over 500,000 families in Gaza.

Meanwhile, Netanyahu demands and gets ever increasing supplies of armaments, military equipment and billions of dollars from the American tax payer whose money is handed out by Congress at the demand of the Israel lobby. The entire American electorate, including millions of unemployed, have no say in the matter.

And as Israel becomes ever more militarily powerful and increases yet again its supply of nuclear weapons hidden from the IAEA inspectorate, the international community can only watch and wait as this frightening partnership threatens the entire Middle East and its essential oil supplies upon which the global economy depends. But Israel cares not.

And apparently neither does the UN Security Council, as devastating war comes ever closer. A war that will inevitably spread to Europe and beyond as Israel eventually uses its nuclear weapons.

Dec 02, 2012 7:43am EST  --  Report as abuse
crod526 wrote:
Israel reaction will push even the most moderate Palestinian into a more hard liner. Hamas knows that every time Israel expands settlements in the West Bank and announces policies such as this one, its helping them recruit future terrorists to its side.

Dec 02, 2012 8:03am EST  --  Report as abuse
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