Palestinian Authority offered deal to lift Smotrich sanctions for funds

According to reports from the Israeli newspaper Israel Hayom, senior Palestinian Authority officials proposed a deal to Israeli Finance Minister Bezalel Smotrich to help lift European sanctions against him in exchange for the release of withheld Palestinian funds.

The proposal, reportedly made four months ago, involved Mahmoud al-Habbash, an advisor to President Mahmoud Abbas, and Hussein al-Sheikh, the Palestinian Vice President. They allegedly offered to sign a letter opposing sanctions imposed on Smotrich by the European Union, Britain, and France. In return, they requested the release of billions of shekels in tax and clearing funds currently held by the Israeli Ministry of Finance to alleviate the Palestinian Authority’s acute financial crisis and allow for the payment of employee salaries.

The negotiations reached an impasse after Smotrich rejected the offer. The report highlights ongoing economic pressures exerted by Smotrich on the Palestinian Authority, including the withholding of approximately 11 billion shekels, restrictions on Palestinian laborers entering the Israeli market, and measures affecting banking relations between Israeli and Palestinian financial institutions.