Israel withholds Palestinian funds after UN vote

JERUSALEM Sun Dec 2, 2012 5:57pm IST

Israeli security officers stand near a tree during clashes with Palestinian stone-throwing protesters (unseen) at a protest against Jewish settlements, in the West Bank village of Nabi Saleh, near Ramallah November 30, 2012. REUTERS/Marko Djurica

Israeli security officers stand near a tree during clashes with Palestinian stone-throwing protesters (unseen) at a protest against Jewish settlements, in the West Bank village of Nabi Saleh, near Ramallah November 30, 2012.

Credit: Reuters/Marko Djurica

Related Topics

JERUSALEM (Reuters) - Israel said on Sunday it was withholding this month's transfer of tax revenues to the Palestinian Authority, after the United Nations' de facto recognition of a Palestinian state.

Under interim peace deals, which Israel says the Palestinians violated by unilaterally seeking an upgrade of their status at the United Nations, it collects about $100 million a month in duties on behalf of the authority.

But, Israeli officials said, the authority owes about $200 million to the Israel Electric Corporation, and that money will now be deducted from the tax transfers.

The cash-strapped authority, which exercises limited self-rule in the occupied West Bank, largely depends on the tax money to pay civil servants' salaries. Yasser Abed Rabbo, a senior Palestinian official, said Israel was guilty of "piracy and theft" by refusing to hand over the funds.

Israel has previously frozen payments to the body during times of heightened security and diplomatic tensions, provoking strong international criticism, such as when the U.N. cultural body UNESCO granted the Palestinians full membership a year ago.

"I do not intend this month to transfer the funds to the Palestinians. In the coming period I intend to use the money to deduct debts the Palestinian Authority owes to the Israel Electric Corporation and other bodies," Finance Minister Yuval Steinitz said on Israel Radio.

The U.N. victory for the Palestinians was a diplomatic setback for the United States and Israel, which were joined by only a handful of countries in voting against upgrading the Palestinians' observer status at the U.N. to "non-member state", like the Vatican, from "entity".

Hours after the U.N. vote, Israel said it was authorising 3,000 new settler homes in the West Bank and East Jerusalem and expediting planning work for thousands more dwellings in a geographically sensitive area close to Jerusalem, which critics said would kill off Palestinian hopes of a viable state.

The United States said the expansion plan, which also drew strong European criticism, was counterproductive to the resumption of Israeli-Palestinian peace talks frozen since 2010.

(Reporting by Maayan Lubell; Writing by Jeffrey Heller; Editing by Pravin Char)

FILED UNDER:

Coordinated Assault

REUTERS SHOWCASE

Gold Imports

Gold Imports

India eases gold import rule in surprise move.  Article 

Indians in Iraq

Indians in Iraq

India says no contact with 39 men held by Islamic State in Iraq.  Full Article 

Sahara Issue

Sahara Issue

Sahara looks to raise $650 million loan to fund bail.  Full Article 

Bhopal Tragedy

Bhopal Tragedy

Bhopal's toxic legacy lives on, 30 years after industrial disaster.  Full Article 

Banking Sector

Banking Sector

After record deal, more India bank takeovers on cards  Full Article 

Islamic Fund

Islamic Fund

India gets new Islamic equity fund but debt market still off-limits  Full Article 

Cricket Tragedy

Cricket Tragedy

Clarke breaks down giving heartfelt Hughes tribute  Full Article 

Nigeria Violence

Nigeria Violence

Bombs, gunfire kill 81 at crowded mosque in Nigeria's Kano  Full Article 

Movie Review

Movie Review

D’Silva's “Ungli” just skims the surface  Full Article | Related Story 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage