(IsraelNN.com) Reuters, which is partly owned by a Qatar investment fund and frequently runs critical articles of Israel, told its readers, "The United States says Jewish settlements in the occupied West Bank threaten any peace between Israel and the Palestinians -- yet it also encourages Americans to help support settlers by offering tax breaks on donations."

Palestinian Authority (PA) leaders, responding to the report and its implicit charges that tax-free donations to Judea and Samaria threaten a peace agreement, said the tax exemptions are contrary to American policy and international law.

PA negotiator Saeb Erakat took the cue and told the news agency that the tax exemptions "contradict American policy." Americans for Peace Now official Ban Sheelf added that the tax breaks are "inconsistent" and that "either they stop the settlements or they stop talking about a two-state solution."
 
Pro-Yesha groups countered the Peace Now charges, accusing it and other anti-Yesha groups of using tax-free donations for political purposes.
Pro-Yesha groups countered the Peace Now charges, accusing it and other anti-Yesha groups of using tax-free donations for political purposes.

The tax exemptions are granted to organizations that use funds for charitable, religious and educational purposes, similar to those that aid the Palestinian Authority. Israeli nationalist groups have pointed out that many Arab "charities" are linked to funding terrorists.

U.S. State Department spokesman Sean McCormack said it is not his department's responsibility to review tax issues.
 
Reuters labeled as "enclaves" the Jewish communities that benefit from the tax-free donations, singling out Hevron as an example.

Sondra Oster Baras, president of Christian Friends of Israeli Communities, responded by asking, "Are you saying you can get a charitable deduction for helping starving people in New York City but you can't get a charitable deduction for helping starving people in Judea and Samaria?  That's an argument that doesn't make sense."