By Andrea Shalal
SAO PAULO (Reuters) – Israel has agreed to resume transferring tax revenues to the Palestinian Authority to fund basic services and bolster the West Bank economy, and money has begun to flow, U.S. Treasury Secretary Janet Yellen said on Tuesday.
“This must continue,” Yellen said in remarks prepared for a news conference, noting that Washington had been urging the Israeli government to release the so-called “clearance revenue” to the Palestinian Authority. She gave no further details.
Palestinian leaders say their ability to govern has been effectively blocked by Israeli restrictions, including withholding of tax revenues due under the Oslo accords signed 30 years ago.
For months, the Authority has been unable to pay full public sector salaries because of a row over the refusal by the Israeli finance ministry to release part of the funds.
U.S. President Joe Biden and his administration have backed Israel’s attacks on Gaza as necessary to root out Hamas after the Oct. 7 attacks in which 1,200 were killed and more than 200 taken hostage. U.S. officials have taken a more critical stance on Israel’s onslaught in recent weeks as the death toll in Gaza nears 30,0000.
Washington recently imposed sanctions on four Israeli men accused of being involved in settler violence and on Friday for the first time called Israel’s expansion of settlements inconsistent with international law.
In the remarks, Yellen said she also urged Israeli Prime Minister Benjamin Netanyahu in a recent letter to reinstate work permits for Palestinians and reduce barriers to commerce within the West Bank.
Treasury declined to release a copy of the letter and gave no details on when it had been transmitted.
“These actions are vital for the economic well-being of Palestinians and Israelis alike,” Yellen said.
Yellen said the United States was also working with the humanitarian sector to help assist innocent Palestinians and get legitimate aid to where it is most needed.
“We continue to explore options for strengthening the West Bank economy” following an executive order issued by President Joe Biden earlier this month, Yellen added.
Yellen said Washington supported the World Bank’s commitments to emergency food security assistance in Gaza and economic support for the West Bank, and other ongoing loan programs by regional development banks and the International Monetary Fund in neighboring Egypt and Jordan.
She said Washington had not seen a significant impact of the conflict on the global economy, but would continue to monitor the situation closely.
She noted that Washington had also led efforts to counter the financing of Hamas and responded to Houthi attacks in the Red Sea.
(Reporting by Andrea Shalal; Editing by Shri Navaratnam)
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