Israel to give $100 million in withheld Palestinian funds

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JERUSALEM (Reuters) -- Israel will give President Mahmoud Abbas's administration around $100 million in tax revenues that had been withheld in retaliation for his statehood bid in the United Nations, Israeli officials said on Wednesday.

They described the handover as a one-time deal, signalling rightist Israeli Prime Minister Benjamin Netanyahu had not formally scrapped sanctions that have hurt the Palestinian Authority in the occupied West Bank and worried world powers.

But the decision follows surprise setbacks for Netanyahu in a national election this month that, while giving him enough of a lead to head the next Israeli government, also set the stage for more moderate statecraft by boosting centrist challengers whom he must now consider as coalition partners.

Under interim peace deals, Israel collects some $100 million a month in duties on behalf of the Palestinian Authority, money Abbas badly needs to pay public sector salaries. It began withholding the funds as punishment for the UN's acceptance of Palestine as a non-member state in November. more

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