Israel withholds tax revenue from Palestinian Authority as dispute escalates

JERUSALEM — The Israeli government plans to withhold at least $127 million in tax revenue from the Palestinian Authority, an Israeli official confirmed Saturday, as tensions between the two sides escalated.

The move appears to be a response to Palestinian attempts to join the International Criminal Court in The Hague.

The decision comes after a week of what Israeli Prime Minister Benjamin Netanyahu described as “unilateral moves” by the Palestinians. They included trying to win passage of a U.N. resolution imposing a time frame for a peace accord and an Israeli withdrawal from occupied territory. The Palestinians have also said they will sign 16 international treaties, including one that would make them members of the ICC, as the international court is known.

The U.N. resolution did not pass in the Security Council. But if the Palestinians’ application to the ICC is successful, it would give them the ability to request investigations of alleged atrocities by Israel. That could include probing Israel’s actions last summer in the Gaza Strip, where it fought a 50-day war with the militant Palestinian group Hamas. More than 2,000 Gazans were killed in the fighting, according to U.N. figures. Israel maintains that a significant number of those slain were militants who fired rockets at Israeli communities.

Although it is still unclear whether the Palestinians will be accepted to the ICC or will succeed with the other treaties, their efforts have exacerbated an already tense situation, pushing Israelis and Palestinians further from the negotiating table.

The U.S. government has criticized the Palestinians’ actions, and some members of Congress have warned that humanitarian aid to the Palestinians may be in jeopardy if they continue in the current direction.

In Israel, Netanyahu and members of his coalition have already cautioned that the Palestinians have more cause for concern when it comes to war-crimes investigations than Israel does.

The Israeli government’s decision to freeze the taxes it collects on behalf of the Palestinians from custom and excise duties — funds the Palestinian Authority relies on to pay salaries and provide public services — appears likely to cause a further flare-up.

“It is not good news. The Palestinians are already upset and frustrated. They believe that Israel has been dragging its feet in the negotiations for years and they have no choice but to take unilateral moves in the international community,” said Moshe Maoz, a professor in the Department of Islamic and Middle Eastern Studies at the Hebrew University of Jerusalem.

Maoz said holding back the tax funds could have harsh consequences, including sparking bloodshed or maybe even an intifada, or violent Palestinian uprising, like those of the late 1980s and early 2000s.

Israel has withheld tax revenue meant for the Palestinians in the past, but such standoffs eased after international pressure and backtracking by the Palestinians. This time, however, that seems unlikely to happen.

According to a report Saturday in the Israeli newspaper Haaretz, the Palestinians were meant to have received the $127 million on Friday, but Netanyahu, during an emergency meeting held Thursday to discuss Israel’s response to the ICC application, decided not to transfer December’s funds. It was unclear whether Israel planned to hold up the tax revenue for additional months going forward.

An Israeli official confirmed the blocking of the funds. He spoke on the condition of anonymity because he was not authorized to provide the information.

In a statement Saturday night, Saeb Erekat, a member of the Palestine Liberation Organization executive committee, criticized the Israeli move.

“Israel is once again responding to our legal steps with further illegal collective punishments,” said Erekat, adding that the Palestinians were told unofficially on Saturday that the tax revenue would not be transferred. “This is not Israeli charity to the Palestinian people they are withholding, but our own money, which is rightfully ours.”

Based on previous peace agreements, Israel collects millions of dollars in customs duties on behalf of the Palestinian Authority. Most of the money is from goods that arrive at Israeli ports destined for the Palestinian market, but there is also indirect taxation on fuel, social benefits, health services and income taxes from Palestinians employed in Israel. The money is normally transferred monthly to the Palestinian Authority.