Germany Chancellor Angela Merkel approved the sale of a Dolphin-style military submarine U-boat to Israel last week on condition that Prime Minister Binyamin Netanyahu unfreeze taxes collected for the Palestinian Authority, Die Welt reported Sunday.

The Prime Minister ostensibly freed the taxes, which were frozen in retaliation for the PA’s unilateral bid for United Nations membership, because PA Chairman Mahmoud Abbas supposedly has ”calmed down.”

However, the day after the Cabinet approved handing over the monthly sum of $100 million, Abbas reiterated that the PA will continue its membership bid, a blatant violation of the Oslo Accords.

Die Welt explained the real reason for the radical change is Germany's policy of approving the sale of the submarine, which the newspaper said will be armed with medium-range missiles. If Israel fits them with nuclear warheads, the submarine would provide an important deterrent if Iranian President Mahmoud Ahmadinejad decides to act out his promise to “wipe Israel off the map.”

The newspaper added, "Israel is widely believed to possess a nuclear arsenal."

Merkel told the Knesset in 2008, "The security of Israel is for me, as German Chancellor, never negotiable,” but the sale of a sixth German submarine was very much negotiable.

“Merkel played poker with Netanyahu,” the newspaper stated. A deal was negotiated over the past year but never signed because Merkel wanted to link it with the diplomatic process. She has more leverage than ever because of sticky relations between Prime Minister Netanyahu and President Barack Obama.

Conversations between Merkel and Netanyahu also were chilly during the “poker game.” She accused him of not adhering to agreements concerning the diplomatic process, and she froze the sale of the submarine because of Israel’s continuing allow Jews to expand communities in Judea and Samaria.

Israel’s freezing of tax funds for the Palestinian Authority gave Merkel an opportunity to exercise pressure on Israel while allowing Netanyahu to secure the submarine, with a hefty subsidy from Germany.

Die Welt also suggested another factor in the sudden change in Merkel's allowing the sale of the submarine: Iran.

Iran’s expulsion of the British ambassador and the storming of the British embassy by protesters in Iran convinced Merkel that “pressure on Tehran is more important than pressure on Tel Aviv,” the newspaper suggested.

Germany will pay for about one-third of the sale cost of the Dolphin-type submarine to Israel. Israel already has three others with two more under construction.