Israel to transfer funds to Palestinians

Israel will begin releasing some of the hundreds of millions of dollars in Palestinian tax money it has frozen for more than a year, in a gesture to the new Palestinian government, Israeli officials said today.

Miri Eisin, spokeswoman for Prime Minister Ehud Olmert, said at least $50m (€37m) would be sent to the government of Palestinian President Mahmoud Abbas. Israel is trying to bolster Abbas in his stand-off against the rival Hamas militant group, which violently seized control of the Gaza Strip last month.

Jacob Galanti, another official in Olmert’s office, said the transfers would begin later today.

In the West Bank town of Ramallah, officials in the office of Abbas’ prime minister, Salam Fayyad, said Israel had said the money would be transferred by Monday.

They said the money is needed to pay the salaries of government workers.

Under peace agreements reached in the 1990, Israel collects customs duties on behalf of the Palestinians then transfers the money to the Palestinian government. The funds, roughly $50m US (€37m) a month, are a key component of the Palestinian government budget.

Israel cut off the transfers after the Hamas militant group was elected to power in January 2006, saying Hamas could use the money to carry out attacks.

Israel announced last month that it would begin releasing the money to Abbas after he dissolved a unity government with Hamas in the wake of the militant group’s takeover of Gaza.