Report: Israel to Resume Transfer of Funds to Palestinians

Israel is to resume transferring millions of dollars in customs duties to the Palestinian Authority, public radio said Wednesday, but the prime minister's office said no decision had yet been taken.

Public radio reported that Prime Minister Benjamin Netanyahu's so-called Forum of Eight senior ministers had voted in favor of resuming the transfers, nearly a month after it froze them over Palestine's admission to UNESCO.

But an official in Netanyahu's office, who spoke on condition of anonymity, said: "No decision has been taken by the prime minister yet."

The transfer of tax and tariff monies collected by Israel on behalf of the Palestinians was frozen on November 1, after their admission to the U.N. cultural organization over the objections of Israel and the United States.

Since then, Netanyahu's inner cabinet has met several times to discuss releasing the funds, but opposition from ministers including hawkish Foreign Minister Avigdor Lieberman kept the freeze in place.

Lieberman and some other senior ministers have said they oppose the release in part because President Mahmoud Abbas's secular Fatah movement is moving ahead with the implementation of a reconciliation agreement with Islamist rival Hamas.

But reports this week suggested Netanyahu was ready to release the funds, in part because of international criticism of the freeze.

And on Monday, the premier told his foreign and defense affairs committee that the freeze could soon be lifted.

"We recognize a respite on the Palestinian side from unilateral moves," he said, in an apparent reference to both the UNESCO admission and Abbas's bid to have Palestine admitted to the United Nations as a full member.

"We don't know how long this situation will continue, but things seem to have calmed down," the Israeli premier said.

Defense Minister Ehud Barak has supported the resumption of the transfers.

"Our stance is that monies should be transferred, they belong to the Palestinians, are collected by us," he said on Monday. "I'm happy the issue is being rethought."

Israel announced the freeze on the transfers, which are governed by a 1994 agreement with the Palestinians, after UNESCO voted to admit Palestine as a member.

Every month, Israel transfers tens of millions of dollars in customs duties which are levied on goods destined for Palestinian markets that transit through Israeli ports, and which constitute a large percentage of the Palestinian budget.

But Israel often freezes the transfer of the funds as a punitive measure in response to diplomatic or political developments viewed as harmful.

The last time the monies were frozen was in May, shortly after Fatah signed an unexpected unity deal with Hamas, which rules the Gaza Strip.