Israel could hand seized Palestinian Authority funds over to third country

Israel could release money seized from the Palestinian Authority (PA) to a third country, pacifying international outrage over attempts to starve the West Bank of funding.

Far-right Finance Minister Bezalel Smotrich has confiscated funds owed to the PA since 7 October, saying the money would go to Hamas, despite Ramallah's long-standing differences with the Gaza-based movement.

Israel collects taxes on behalf of the PA and then transfers the revenues to Ramallah, which are used to pay for essential services and public sector salaries.

The arrangement puts Ramallah at the mercy of Israel, who frequently deducts or withholds payments during times of differences with Ramallah.

Israel's latest seizure risks financial collapse for the PA, an outcome that even some members of the hardline Israeli government oppose. Such a scenario would likely spark serious unrest in the occupied West Bank.

An arrangement has been suggested that would see PA funds sent to a third country and then transferred to Ramallah, a way of Israel not having to directly hand over the cash to Ramallah.

Earlier this week, the US and Norway were both named as possible third parties.

Smotrich, Prime Minister Benjamin Netanyahu, and other members agreed in principle to the solution during a security cabinet meeting on Thursday night, according to The Times of Israel.

Far-right National Security Minister Itamar Ben Gvir wants more time to review the proposal, meaning there is no solution to the ongoing rift with Ramallah for now.

Both Smotrich and Ben Gvir have been accused of trying to undermine the PA and calling for the ethnic cleansing of Gaza and the West Bank.

Defence Minister Yoav Gallant has stressed that security in the occupied West Bank hinges on the PA.

A new uprising in the occupied territory is something that even Israeli ministers in Netanyahu's hard-right government oppose due threat this poses to the military already bogged down in Gaza and on the border with Lebanon.

"I will say this in the clearest way possible: A strong Palestinian Authority is in the best security interests of Israel," Gallant said.

Israel has killed nearly 25,000 Palestinians in Gaza since 7 October, the vast majority women and children, with civilian infrastructure utterly devastated in the bombardment.

Israeli forces and settlers have launched waves of attacks in the occupied West Bank since 7 October, killing 367 Palestinians.