This evening (Thursday), the cabinet discussed the proposal brought by Finance Minister Bezalel Smotrich according to which tax revenues collected on behalf of the Palestinian Authority for the payment of its employees in the Gaza Strip will not be transferred to the PA directly but will be held in trust in a third country and will not be released without Smotrich's approval, to ensure that these funds do not end up in the hands of Hamas.
Despite pressure from the Biden Administration to release the funds to the PA, Smotrich has adamantly refused to transfer the Gaza funds.
At the beginning of the war, the Finance Minister stopped the transfer of Gaza funds to the PA, and after Minister Galant's opposition to the course of action, the decision was brought up for discussion in the Cabinet in November. The political and security cabinet adopted Smotrich's decision and so, since the beginning of the war, no money for Gaza has been transferred to the Palestinian Authority.
Arutz Sheva - Israel National News has learned that following a conversation between Smotrich and diplomatic officials, the Finance Minister has come up with a new plan to satisfy the American government's desire to see the funds transferred and his desire to keep the funds out of the hands of Hamas - transferring the funds to the PA through a third party.
Under this plan, the PA would receive all of the money on the condition that none of the funds are transferred to Gaza. If the agreement is violated, Israel would freeze all of the transfer of funds to the PA.
The goal of the plan is to secure international acceptance of Israel's position that these funds cannot be transferred to Gaza as long as Hamas remains in control of the territory.
The political-security cabinet is expected to vote on Smotrich's plan in the near future.