Palestinian Finance Minister warns of severe financial crisis as Israel withholds settlement funds

Finance Minister Istiwan Salama said Israel’s threats to cut banking ties and its continued withholding of settlement‑clearing funds jeopardise the ability of Palestinians to receive basic services such as water, electricity and fuel. He noted that the Palestinian Authority has gone 15 months without these funds and is now entering the 16th month, with cash reserves of about 100 million shekels against monthly operating needs of roughly 1.5 billion shekels.

Salama announced that the government will continue to pay 50 % of public‑sector salaries through the end of the year, a level that requires about 650 million shekels each month. Funding will come from local revenues, external aid, bank borrowing and improved fiscal management. The ministry is pushing for a shift to electronic payments, seeking additional external assistance, and warning that any further Israeli banking cut would disrupt water, electricity, fuel and imports, especially at the Karameh crossing, while also threatening health and education services.