The Israeli Knesset on Wednesday approved in its first reading a bill that would allow additional Palestinian Authority clearance funds to be frozen, a move expected to increase financial pressure on the authority.
Israeli daily Haaretz reported that the bill would authorise the freezing of additional Palestinian Authority funds.
Under the proposal, submitted by Moshe Passal of the Likud party, Israel would freeze each year an amount equal to the funds transferred by the Palestinian Authority to Gaza during the previous year.
According to Haaretz, the frozen money would be used to pay compensation to people affected by what the bill describes as terrorist acts originating from Gaza.
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The bill was backed by 12 of the Knesset’s 120 members, with no votes against. It will now return to the Knesset’s Foreign Affairs and Defence Committee for further discussion before being brought for its second and third readings, which are required before it can become law.
Haaretz said Israel is currently withholding about 14 billion shekels ($4.6 billion) in Palestinian tax revenues collected on imports destined for the Palestinian territories, known as clearance funds. Israel says the funds are being withheld because they are used to encourage and support terrorism.
The newspaper added that while the withheld revenues continue to accumulate in the Israeli treasury each month, the Palestinian Authority government in Ramallah has been forced to introduce further austerity measures to cope with a financial crisis that has continued for nearly three years.
According to Haaretz, the total amount withheld has been accumulating since 2019, with around 400 million shekels ($131.41 million) added each month.
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