Israel halts tax payments to Palestinians
JERUSALEM, Feb 1 (Reuters) - Israel halted monthly tax payments to the cash-strapped Palestinian Authority one week after the election victory of Hamas, but the militant group said it would turn to the Arab world for financial support.
The customs revenue collected by Israel on behalf of the Palestinians is the main source of funding for their budget and is used to pay an estimated 140,000 government workers.
Palestinian Economy Minister Mazen Sonnoqrot decried what he called Israel's "illegal decision", saying it amounted to "collective punishment."
The United States and the European Union have also threatened to cut off future funding if Hamas does not reject violence and recognise Israel.
Hamas has urged foreign donors to maintain aid but says it could still find alternative sources of funding in the Arab world. It dispatched a delegation of its Gaza-based officials and exiled leaders on a tour of Arab countries to urge them to keep the money flowing.
"The tour will aim to clarify Hamas's position based on its election agenda and to press Arab countries to continue with financial aid to the Palestinian people," said Sami Abu Zuhri, a Hamas leader in Gaza.
PAYMENTS HALTED
Israeli Foreign Ministry spokesman Mark Regev said Israel did not make its scheduled Feb. 1 payment, estimated by the Palestinian Authority at $55 million.
Regev said future payments were also suspended pending a policy review ordered by Prime Minister Ehud Olmert, who took over after Ariel Sharon was incapacitated by a stroke on Jan 4.
Olmert has called for a boycott of any Palestinian government that includes Hamas, which is sworn to Israel's destruction and has led a campaign of suicide bombings and attacks against Israel.
Hamas, which has largely held to a year-long ceasefire, trounced Palestinian President Mahmoud Abbas's long-dominant Fatah movement in the Jan 25 parliamentary election.
In Washington, U.S. President George W. Bush demanded that Hamas "recognise Israel, disarm, reject terrorism and work for lasting peace" in his State of the Union address.
Hamas leaders said the group would stick to its guns. "Our resistance is legitimate self-defence in the face of aggression," said Zuhri.
An official close to Palestinian President Mahmoud Abbas denied a report from Egypt that he would demand Hamas formally recognise Israel for it join the next government.
But the official, who declined to be identified, said the president would insist the new government commit to implementing past agreements with Israel.
CASH-CRUNCH
The Palestinian Authority faces a financial crunch if Israel continues to withhold the tax money.
Unemployment in the Palestinian territories runs high, at 22 percent, and half the Palestinian population lives in poverty. In Gaza, many Palestinians live on an average of $2 a day.
"Until the review that is under way is completed, there will not be automatic transfers," Regev said.
Israel has long collected customs revenue on behalf of the Palestinians. It is supposed to hand the money over to the governing Palestinian Authority on the first of each month.
Israel has withheld tax payments in the past during other disputes.
"This is our money and Israel is not a donor country," Sonnoqrot told Reuters. "Israel should immediately release the money because it belongs to the Palestinian people."
He estimated about 1 million Palestinians would be affected by Israel's decision, and warned: "This may cause chaos."
Sonnoqrot said the Palestinians had urged the United Nations and Western powers to pressure Israel to "release our money".
Regev said Israel's decision to withhold the money was "in synch" with the international consensus.
But the Quartet of major powers trying to broker Middle East peace have said donors would continue to aid Abbas's caretaker government, at least until Hamas formed a new administration.
In Cairo, Egyptian intelligence chief Omar Suleiman Aboul Gheit said after talks with Israeli Foreign Minister Tzipi Livni: "We ask Israel to free all Palestinian tax money and we do not support the punishment of the Palestinian people."
The decision to cut off funding came as Olmert sent riot police into the West Bank to remove part of an unauthorized Jewish settler outposts in a bid to assert control after assuming the powers of Ariel Sharon.
In scenes of violence reminiscent of Israel's Gaza pullout last year, ultranationalists at the Amona outpost barricaded themselves in houses and on rooftops, throwing stones at police on horseback who responded with clubs and water cannons.
About 100 protesters and police were injured in the clash.
Olmert has targeted 24 settlement outposts for removal in a bid to implement a long-standing commitment under a U.S.-backed peace "road map". Palestinians fear go-it-alone moves by Israel would deny them a viable state. (Additional reporting by Jonathan Saul in Adam Entous in Jerusalem and Nidal al-Mughrabi in Gaza)
The customs revenue collected by Israel on behalf of the Palestinians is the main source of funding for their budget and is used to pay an estimated 140,000 government workers.
Palestinian Economy Minister Mazen Sonnoqrot decried what he called Israel's "illegal decision", saying it amounted to "collective punishment."
The United States and the European Union have also threatened to cut off future funding if Hamas does not reject violence and recognise Israel.
Hamas has urged foreign donors to maintain aid but says it could still find alternative sources of funding in the Arab world. It dispatched a delegation of its Gaza-based officials and exiled leaders on a tour of Arab countries to urge them to keep the money flowing.
"The tour will aim to clarify Hamas's position based on its election agenda and to press Arab countries to continue with financial aid to the Palestinian people," said Sami Abu Zuhri, a Hamas leader in Gaza.
PAYMENTS HALTED
Israeli Foreign Ministry spokesman Mark Regev said Israel did not make its scheduled Feb. 1 payment, estimated by the Palestinian Authority at $55 million.
Regev said future payments were also suspended pending a policy review ordered by Prime Minister Ehud Olmert, who took over after Ariel Sharon was incapacitated by a stroke on Jan 4.
Olmert has called for a boycott of any Palestinian government that includes Hamas, which is sworn to Israel's destruction and has led a campaign of suicide bombings and attacks against Israel.
Hamas, which has largely held to a year-long ceasefire, trounced Palestinian President Mahmoud Abbas's long-dominant Fatah movement in the Jan 25 parliamentary election.
In Washington, U.S. President George W. Bush demanded that Hamas "recognise Israel, disarm, reject terrorism and work for lasting peace" in his State of the Union address.
Hamas leaders said the group would stick to its guns. "Our resistance is legitimate self-defence in the face of aggression," said Zuhri.
An official close to Palestinian President Mahmoud Abbas denied a report from Egypt that he would demand Hamas formally recognise Israel for it join the next government.
But the official, who declined to be identified, said the president would insist the new government commit to implementing past agreements with Israel.
CASH-CRUNCH
The Palestinian Authority faces a financial crunch if Israel continues to withhold the tax money.
Unemployment in the Palestinian territories runs high, at 22 percent, and half the Palestinian population lives in poverty. In Gaza, many Palestinians live on an average of $2 a day.
"Until the review that is under way is completed, there will not be automatic transfers," Regev said.
Israel has long collected customs revenue on behalf of the Palestinians. It is supposed to hand the money over to the governing Palestinian Authority on the first of each month.
Israel has withheld tax payments in the past during other disputes.
"This is our money and Israel is not a donor country," Sonnoqrot told Reuters. "Israel should immediately release the money because it belongs to the Palestinian people."
He estimated about 1 million Palestinians would be affected by Israel's decision, and warned: "This may cause chaos."
Sonnoqrot said the Palestinians had urged the United Nations and Western powers to pressure Israel to "release our money".
Regev said Israel's decision to withhold the money was "in synch" with the international consensus.
But the Quartet of major powers trying to broker Middle East peace have said donors would continue to aid Abbas's caretaker government, at least until Hamas formed a new administration.
In Cairo, Egyptian intelligence chief Omar Suleiman Aboul Gheit said after talks with Israeli Foreign Minister Tzipi Livni: "We ask Israel to free all Palestinian tax money and we do not support the punishment of the Palestinian people."
The decision to cut off funding came as Olmert sent riot police into the West Bank to remove part of an unauthorized Jewish settler outposts in a bid to assert control after assuming the powers of Ariel Sharon.
In scenes of violence reminiscent of Israel's Gaza pullout last year, ultranationalists at the Amona outpost barricaded themselves in houses and on rooftops, throwing stones at police on horseback who responded with clubs and water cannons.
About 100 protesters and police were injured in the clash.
Olmert has targeted 24 settlement outposts for removal in a bid to implement a long-standing commitment under a U.S.-backed peace "road map". Palestinians fear go-it-alone moves by Israel would deny them a viable state. (Additional reporting by Jonathan Saul in Adam Entous in Jerusalem and Nidal al-Mughrabi in Gaza)
posted by Marko at 2/01/2006 08:38:00 AM
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