Israel Mulls Funds Transfer to Palestinians

Israel is considering releasing tax money it has been withholding from the Palestinian Authority in response to their bid for UNESCO membership, Prime Minister Benjamin Netanyahu said on Monday.

Israel on November 1 announced it was freezing the transfer of the tax and tariff funds it collects on behalf of the Palestinians after they gained full UNESCO membership despite Israeli and U.S. objections.

Israel's security cabinet has in recent weeks met to reconsider the move but decided to maintain the freeze, citing the UNESCO bid, as well as the Palestinian push for U.N. membership and reconciliation talks between Fatah and Hamas.

But on Monday, Netanyahu told the foreign and defense affairs committee that the freeze could soon be lifted, his spokesman told reporters.

"Israel is considering in the near future transferring tax money to the Palestinian Authority, this will be based on a governmental decision. We will examine this situation every month," Netanyahu said.

"We recognize a respite on the Palestinian side from unilateral moves. We don't know how long this situation will continue, but things seem to have calmed down."

Netanyahu also dismissed the importance of talks between the Fatah movement of Palestinian president Mahmoud Abbas and the Islamist Hamas movement, which have been strongly criticized by Israel.

"We see that the unity talks with Hamas are more of a symbolic and tactical move that have no concrete results," he said.

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 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 the Fatah movement signed an unexpected unity deal with Hamas, which rules the Gaza Strip.