After delay, Israeli Cabinet Agrees to Transfer NIS 250m to Palestinians
 
By Aluf Benn, Haaretz Correspondent and The Associated Press
05/02/2006   
 
Acting Prime Minister Ehud Olmert on Sunday formally authorized the transfer of some NIS 250 million in tax revenues to the Palestinian Authority, monies which Israel had withheld following Hamas` victory in the parliamentary elections.

Olmert, nevertheless, decided that future transfers of the VAT and custom money that Israel collects for the PA will be examined on a monthly basis. The acting prime minister instructed Defense Minister Shaul Mofaz to coordinate the discussions on the transfers.

Olmert held a special meeting on Sunday to discuss the fallout from the Palestinian elections, which saw the radical Islamic group Hamas win a landslide victory.
 
The defense establishment advised Olmert to transfer the money in order to prevent the collapse of public services in the West Bank and the Gaza Strip, and to underscore Israel`s demand that the PA disarm Hamas and other armed factions.

The recommendation also comes in the wake of a decision this week by the international community, headed by the Quartet, to continue assistance to the PA as long as there is no change in its government. The Quartet`s representatives have asked Israel to fulfill its part in financing the PA by transferring the tax monies.

All the ministers attending the meeting, including Mofaz and Foreign Minister Tzipi Livni, supported the transfer of the funds, except for Tzachi Hanegbi, who voiced his reservations.

"We are not interested in harming the Palestinian`s day-to day fabric of life," Olmert said at the meeting. "The current Palestinian government is the same one which has received the money up till now, and the successive Israeli governments have all transferred the money."

"We have ways to guarantee that the money goes to where it is supposed to go," Olmert said.
He also said that the current transfer of money will be completed by February 15, when Abbas is slated to appoint Hamas to form the next government.

The acting Palestinian Finance Minster, Jihad Wazir, wrote a letter to Israel last week in which he stated that the money would be used to cover budgetary shortfalls and that the PA intended to spend it all in the coming days.

Wazir pledged the money would only be dealt with by the existing government and would not fall into other hands.