Israel to release withheld Palestinian tax revenues

Israel says it will resume the transfer of Palestinian Authority (PA) tax revenues that it has been withholding as punishment for unilateral Palestinian actions.

The hundreds of millions of dollars in tax revenues make up two-thirds of the annual budget of the PA, excluding foreign aid. The funds are critical to running the PA, which exercises limited self-rule and pays the salaries of its public employees. 

Prime Minister Benjamin Netanyahu's office said Friday the decision was made because of humanitarian considerations following the recommendation of Defense Minister Moshe Ya'alon, the Israel Defense Force and the Shin Bet security service. 

Israel's move comes amid pressure from the U.S. following Netanyahu's statements against a two-state solution during the election campaign, which put the allies at odds with each other. White House Chief of Staff Denis McDonough warned Monday that “an occupation that has lasted for almost 50 years must end,” and that “the Palestinian people must have the right to live in and govern themselves in their own sovereign state.”

Earlier this year, Israel withheld tax transfers it collects for the cash-strapped government of Mahmoud Abbas after he began the process of joining the International Criminal Court (ICC) — a move potentially paving the way for a war crimes investigation of Israel.

Israel took a similar step in December 2012, freezing revenue transfers for three months after the PA launched a campaign for recognition of statehood at the United Nations.

Netanyahu's move to release tax revenues may be an attempt to sway the Palestinians away from pursuing a case against Israel at the ICC, which the Palestinians will officially join on April 1. 

That and other moves prompted Abbas to complain that Israel had eroded the authority of his self-rule government in the West Bank to the point where it has "no real power here over anything."

Much of the funds released by Israel will go to pay off Israeli entities, including hospitals, water and electricity companies, according to Haaretz. 

Israel's electricity company has cut off power in northern region of the West Bank twice this past winter for unpaid bills. 

Al Jazeera and wire services