Israelis agree to release Palestinian tax revenues

Decision aims to bolster Abbas ahead of summit

June 25, 2007|By Ken Ellingwood | Ken Ellingwood,LOS ANGELES TIMES

JERUSALEM -- Israel's Cabinet agreed yesterday to release frozen tax revenues as part of a bid to bolster Palestinian Authority President Mahmoud Abbas in his standoff with the militant Hamas movement.

The decision came as Israeli Prime Minister Ehud Olmert prepared to meet today with Abbas and the leaders of Egypt and Jordan to explore ways to isolate Hamas and revive peacemaking between Israel and the Palestinians.

Israel has vowed to help Abbas, a relative moderate, after Hamas forces routed his Fatah party from the Gaza Strip two weeks ago, leaving the Islamist movement in sole control there and Fatah's domain limited to the West Bank.

The decision to unfreeze the Palestinian tax money gives Olmert something concrete to offer the politically weak Abbas during today's summit in the Egyptian Red Sea resort of Sharm el-Sheik. Egyptian President Hosni Mubarak will play host to the summit, which is also to include King Abdullah II of Jordan.

In its decision on tax revenues, the Israeli government stopped short of approving fund transfers, an Olmert spokesman said. The amounts to be transferred, and timing, are to be determined after the discussions in Sharm el-Sheik, said David Baker, an official in the prime minister's office.

"This is the first necessary step in the process," Baker said.

At stake is $500 million to $600 million that Israel has withheld since Hamas won Palestinian parliamentary elections in January 2006. Israel transferred $100 million earlier this year and has applied some of the remainder to pay debts owed by the Palestinian Authority to Israeli companies.

Under a 1994 economic pact, Israel collects tax and customs revenues on behalf of the Palestinians, about $50 million monthly. It froze those transfers once control of the Palestinian Authority fell to Hamas, which calls for destruction of the Jewish state.

Some Israeli hard-liners said yesterday that Abbas should be required to crack down on armed groups before receiving the money.

Avigdor Lieberman, a Cabinet minister from the hawkish Yisrael Beiteinu party, said Abbas "didn't lift a finger" to help win the release of Cpl. Gilad Shalit, who was captured by Gaza-based militants a year ago today.

"Abu Mazen isn't our hope," Lieberman told Israel radio, employing Abbas' nickname. "This man is only an obstacle."

Abbas named a new Cabinet this month after factional fighting that, by some tallies, killed nearly 150 people. The new government is led by political independent Salam Fayyad, a moderate respected by leaders in Israel and the United States.

Israel and the Bush administration hope support for Abbas and Fatah will help isolate Hamas. But the Islamist group insists that it is still in charge, in effect leaving Palestinians ruled by rival administrations in Gaza and the West Bank.

Deposed Palestinian Prime Minister Ismail Haniyeh of Hamas characterized the release of funds by Israel as politically motivated "bribery." He said the tax and customs revenues should be distributed to all Palestinians, not just those in the West Bank.

The Arab leaders hope to isolate Hamas out of concern that its takeover in Gaza could end up destabilizing their regimes by encouraging like-minded Islamist groups such as the Muslim Brotherhood in Egypt, analysts said.

"Egypt does not want to have an intransigent Taliban-like state at its doorstep in Gaza because that would threaten its own security," said Nabil Abdel, an expert on Islamist groups at al-Ahram Center for Political and Strategic Studies in Cairo.

Some Arab leaders have urged reviving the peace process, which stalled after the collapse of the Camp David talks in 2000 and the Palestinian uprising a few months later.

Palestinians say that only significant concessions from Israel, such as a halt to building in Jewish settlements or ending construction of its West Bank barrier, can resuscitate peacemaking.

Abbas' aides say the best way to boost his standing is to restart talks over issues at the heart of the Middle East conflict, including the fate of refugees and Jerusalem and the borders of a future Palestinian state.

Israeli officials want Abbas to disarm groups in the West Bank that have carried out numerous attacks against Israelis. But the main Fatah-tied militia, the al-Aqsa Martyrs Brigade, is loosely organized and operates outside Abbas' control. Since the Gaza fight, its gunmen have sought to intimidate Hamas members in the West Bank by raiding government offices and warning public employees from Hamas to stay home.

Ken Ellingwood writes for the Los Angeles Times.

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