Israel must take six punitive measures against the Palestinian Authority to combat its push for unilateral statehood and its legal campaign against the Jewish state, Finance Minister Bezalel Smotrich said on Wednesday.“At the last cabinet meeting, many ministers, including myself, made an unequivocal demand that harsh punitive measures be taken against the Palestinian Authority for its unilateral actions against Israel,” Smotrich said.National Security Adviser Tzahi Hanegbi was tasked with creating an action plan, but to date, nothing has happened, Smotrich said.He spoke up just after Ireland, Spain, and Norway announced their unilateral recognition of Palestinian statehood and two days after International Criminal Court Chief Prosecutor Karim Khan announced his intent to pursue arrest warrants against top Israeli and Hamas leaders.Smotrich called on Netanyahu to enact a six-point plan that included withholding tax fees collected on behalf of the PA and accelerating West Bank settlement construction.
Three new settlements for every country that recognizes a Palestinian state
The government, Smotrich said, should agree that three new settlements will be approved for every country that recognizes Palestinian statehood.It should, Smotrich insisted, also cancel the “Norway Agreement,” approved in January, by which monthly tax fees of 270 million shekels earmarked for Gaza would be held in escrow by Norway. Oslo would, in turn, transfer the funds to the PA in the form of a loan. Smotrich targeted this agreement in particular because Norway had recognized Palestinian statehood.Smotrich urged the government to advance a decision to strengthen West Bank settlements and to cancel the VIP travel permits for senior PA officials.
He also announced that he intended to stop transferring to the PA the tax fees that Israel collects on its behalf.
US response
US Treasury Secretary Janet Yellen said on Thursday she was concerned by a threat from Israel to cut off Palestinian banks from their Israeli correspondent banks, a move that would close a critical lifeline for the Palestinian economy.
Yellen told a news conference ahead of a G7 finance ministers meeting beginning on Friday that the US and its partners "need to do everything possible to increase humanitarian assistance to Palestinians in Gaza, to curtail violence in the West Bank, and to stabilize the West Bank's economy."
"I expect other countries to express concern about the impact of such a decision on the West Bank economy. I think this would have a very adverse effect also on Israel."
Responding to Yellen's comments, Smotriched posted on X that he could not renew a waiver that allowed Israeli banks to process shekel payments for services and salaries tied to the Palestinian Authority.
כמה מילים על צביעות:המערכת הפיננסית של הרש"פ נגועה בטרור עד צוואר. תומכת טרור, מגבה טרור ומממנת טרור, ולכן על פי החקיקה במדינות רבות בעולם, ובראשן ארה"ב, אסור לעבוד איתה ולהעביר אליה כספים, ומי שעושה זאת חשוף לסנקציות בינלאומיות.במשך שנים, ובמסגרת עצימת העיניים מול הטרור… pic.twitter.com/VfBariFJf2
— בצלאל סמוטריץ' (@bezalelsm) May 23, 2024
Smotrich elaborated, claiming that Palestinian banks are still funding terrorism and Israeli banks would be open for lawsuits for violating anti-terrorism financing laws.
Reuters contributed to this report.