Israel to release withheld tax to Palestinian Authority

Israel has said it will release to the Palestinian Authority millons of dollars in tax revunes it froze after the Palestinian January move to join the International Criminal Court.

In a statement on Friday, the Israeli prime minister's office said: "Tax revenues that have been accumulated through February will be transferred, after payments for services to the Palestinian population have been deducted, including electricity, water and hospital bills."

Israel collects tax on behlaf of the Palestinian Authority, but froze its transfer on January 2, after the Palestinians moved to join the ICC, where they would be able to sue Israeli officials for breaches of international law.

The decision comes 10 days after Israeli elections returned prime minister Binyamin Netanyahu to power.

According to the statement, the decision was based on "humanitarian concerns and in overall consideration of Israel's interests at this time", among other factors.

"Given the deteriorating situation in the Middle East, one must act responsibly and with due consideration alongside a determined struggle against extremist elements," it quoted Netanyahu as saying.

Israel transfers to the PA about $127m a month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports. These revenues make up about two-thirds of the authority's annual budget.

World powers had called on Israel to release the funds, while a senior Palestinian official said withholding the money is an Israeli ploy aimed at collapsing the Palestinian Authority.

The Palestinians moved to join international bodies in frustration at the failure of the latest round of talks with Israel, and Israel's continued occupation of Palestinian territories.

The outgoing UN envoy to the stalled Middle East peace process, Robert Serry, said on Thursday that the chances of a negotiated two-state settlement were diminishing.