Against the backdrop of the economic crisis in the Palestinian Authority, the Biden administration is looking at ways to transfer financial support to them out of fear that its collapse will hinder a solution to the Gaza crisis following Israel's expected victory over Hamas, the Wall Street Journal reported this morning (Sunday).
According to the report, PA officials have warned that funding for salaries for essential government services may run out as early as the end of February, in response to which the Biden administration is working to find ways to inject new funds with the cooperation of other countries.
The fear in Washington is that without financial income, the PA will collapse and thus not be able to fulfill its expected role of running the Gaza Strip at the end of the war. The Biden administration recently proposed that a renewed Palestinian Authority be established to govern the Strip following the conflict.
The organization run by Mahmoud Abbas pays the wages of 150,000 workers in Judea, Samaria and Gaza. In October 2023, Finance Minister Bezalel Smotrich suspended the transfer of funds to PA employees in Gaza on the grounds that they were being transferred directly to Hamas.
Last December, President Biden asked Prime Minister Netanyahu to accept the proposal to transfer the frozen tax revenues to Norway for safekeeping until an arrangement is found that will remove Israel's fear that the money will go to Hamas.
In response to the proposal, Israel announced that it had agreed to the plan in January, but American, European and Palestinian officials claimed that several disputes remained.
