Jerusalem: Israel today said it would restore the monthly transfer of tax revenues it collects for the cash- strapped Palestinian Authority, days after US President Barack Obama prodded both sides to resume stalled peace process.
Israel decided to halt transfer of tax and tariff funds - about USD 100 million it collects each month on behalf of the Palestinian Authority - in December as a punishment after Palestinian President Mahmoud Abbas successfully secured an upgraded UN membership for Palestinian statehood.
US had also advised him to give up on the bid. Prime Minister Benjamin Netanyahu "has decided to authorise the transfer of fiscal revenues to the Palestinian Authority," the Prime Minister`s office said in a statement, adding the new finance minister had already "charged officials with taking up the transfer of funds again."
Sources in the Palestinian Authority told PTI that the US President recently expressed his displeasure regarding the UN bid in talks with Abbas but had also agreed to push Israel to release the withheld funds.
US Secretary of State John Kerry who stayed back after Obama`s visit is said to have been following up with both sides on the issue.
In January, Netanyahu authorised a one-off release of USD 100 million in a gesture towards the Palestinian Authority given its "very difficult financial situation".
Palestinian Authority officials on conditions of anonymity said that their requests for financial aid from the Arab world has largely "fallen on deaf ears" and the administration may collapse if "there isn`t an urgent infusion of funds".
During a three-day visit to Israel and the occupied West Bank last week, the US President called on both sides to resume peace negotiations that have been stalled since 2010 over continued settlements that Israel builds in the occupied West Bank.
Palestinians seek to establish a state in the Gaza Strip and the West Bank with East Jerusalem as its capital -- territories captured by Israel in the 1967 Arab-Israeli War.