Israel freezes cash transfer to Palestinians

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The Israeli government announced on Sunday that it would hold up an $89 million cash transfer to the Palestinian Authority because of a reconciliation deal between rival Palestinian factions Hamas and Fatah, regional media reported.

The Israeli government announced on Sunday that it would hold up an $89 million cash transfer to the Palestinian Authority because of a reconciliation deal between rival Palestinian factions Hamas and Fatah, regional media reported.

"Israel wants assurances that any money transferred to the Palestinians will not reach the militant Hamas organisation, which is set to become part of the Palestinian government," Israeli Finance Minister Yuval Steinitz was quoted by media reports as saying.

He said the Palestinians should "give us guarantees" that the money will not be used to "finance terror operations against Israeli citizens."

Israel collects some tax and customs fees for the Palestinians under the 1993 Oslo agreements, providing the Palestinian Authority with $1 billion to $1.4 billion annually, which accounts for two-thirds of the PA budget.

The money that Israel decided to withhold was supposed to be transferred later this week. The Israeli government withheld money transfers to the Palestinian Authority several times in the past decade, citing concerns that it was used by Palestinian militants to stage attacks on Israel.

Palestinian Prime Minister Salam Fayyad criticized the Israeli move, saying that it "will not deter us from moving forward to end the division, restore national unity, and to establish our independent state," the official Palestinian Wafa news agency said.

The Israeli authorities have denounced the peace deal between Hamas and Fatah, reached last week during talks in Egypt, and threatened sanctions, calling on Palestinian leader Mahmoud Abbas to choose between peace with "terrorist organization" Hamas and Israel.

The reconciliation agreement ended a four-year split between the two Palestinian factions who have been at loggerheads since Hamas ousted Fatah forces from Gaza in 2007. Under the deal, Hamas and Fatah agreed to form a transitional government and hold new elections within a year.

MOSCOW, May 1 (RIA Novosti) 

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