Norway has agreed to help facilitate the transfer of frozen tax funds earmarked for the Palestinian Authority (PA) that were collected by Israel, the Norwegian government said on Sunday, according to Reuters.

The temporary solution will allow payments to resume and prevent a financial collapse for the PA, enabling it to pay salaries and provide essential services such as schools and healthcare, Norway said.

"This is critical to promoting stability in the region and for the Palestinian Authority to have legitimacy among its people," Norwegian Prime Minister Jonas Gahr Stoere said, as quoted by Reuters.

Under the solution agreed with Israel and PA officials, Norway will serve as an intermediary for holding revenues that Israel has withheld since October 7.

"The Palestinian Authority is then willing to accept the other funds," Norway said.

The portion of the revenue Norway will keep equals the portion that Israel estimates for Gaza, said a Norwegian foreign ministry spokesperson.

In November, the Political-Security Cabinet decided to offset from the funds of the Palestinian Authority all the money intended for the Gaza Strip, in addition to the offset that is carried out, in accordance with the law, of funds paid to terrorists and their families.

Upset by the Israeli move, the PA refused to accept the money that Israel collects on its behalf, unless the funds for Gaza are included, and returned it.

On January 21, Israeli officials said the Cabinet had approved a plan for frozen tax funds earmarked for the Gaza Strip to be held by Norway instead of transferred to the PA.