Israel to Withhold $180 Million from Palestinians Over Payments to Terrorists

JERUSALEM, Israel - Israel will withhold roughly $180 million in tax transfers to the Palestinian Authority (PA) to offset stipends paid to Palestinian terrorists and their families, the Israeli cabinet announced on Sunday. 

 Under interim peace agreements, Israel collects hundreds of millions of dollars in tax revenue for the Palestinian Authority. The decision to freeze the funds came after a report from Israel's Defense Ministry said the PA transferred $180 million "in indirect support of terrorism in 2020." 

The Prime Minister's office said the funds "will be frozen on a monthly basis out of the payments that Israel transfers to the Palestinian Authority."

Israel has long objected to the PA's "Martyr Fund," a type of welfare system that provides money to thousands of Palestinian families whose relatives have been killed, wounded, or imprisoned in attacks against Israel. The Palestinians argue that many prisoners are unfairly held in Israel and that only a small percentage of the money actually goes to those involved in violent attacks. 

Israel claims the stipends are an incentive for terror attacks against Israelis. 

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PA officials have indicated they are considering reforming the policy of paying the families of Palestinians convicted of terrorism, the Times of Israel reports. Senior officials told the paper in December that reforming the law would be a part of a new diplomatic push. 

However, just last month, the PA reportedly approved a payment of more than $40,000 to the family of Muhannad Halabi, who was shot and killed after murdering two Israelis in a 2015 stabbing attack in Jerusalem.

President Joe Biden's administration has repeatedly condemned the controversial Palestinian payment policy and called on Palestinian leaders to stop “providing compensation for individuals in prison for acts of terrorism.”