Lt.-Col. (res.) Adv. Maurice Hirsch, a senior researcher at the Jerusalem Center for Security and Foreign Affairs, noted, “The trend we’re seeing is the opposite of what we anticipated. While we expected a sharp rise in payments due to the Palestinian Authorities policy and the high number of terrorist arrests and casualties, in reality, we are seeing a significant decline.”
Several factors have contributed to this unexpected decrease in funding. One major issue has been the PA’s decision to restrict Red Cross access to prisons, which created significant bureaucratic hurdles. Another key factor is the unprecedented economic pressure on the PA, with recent data from the Finance Ministry showing that Israel deducted about NIS 3 billion from PA funds through November 2024. Additionally, the ongoing conflict in Gaza has caused considerable difficulties in transferring payments and producing necessary documentation, leaving families of terrorists struggling to submit forms and even receive the funds themselves according to Jerusalem post reports.
Hirsch emphasized that these challenges are not a result of any ideological shift by the PA, but rather a direct consequence of measures taken by Israel. For the first time, Israel’s actions and the resulting material conditions have forced the PA to include terrorist salaries in its economic cuts—something that has never occurred, even during the most severe crises.
Looking ahead to 2025, the JCFA report recommended continuing to apply economic pressure, preventing external cooperation that supports the payments, and creating additional bureaucratic obstacles. Hirsch underscored the importance of maintaining this pressure, stating, “2024 shows that with the right mix of economic, legal, and operational actions, terrorist payments can be reduced. If we maintain this approach, we may see further reductions in terror compensation next year.”
Pay-for-Slay and Legislative Response
In an earlier interview, Hirsch pointed out that under the Oslo Accords, Israel agreed to transfer "tax money" to the PA, including funds for goods unloaded at Israeli ports. However, due to the growing issue of the PA’s pay-for-slay system, Israel passed legislation in 2018 that allows it to freeze or deduct some of these payments to the PA.
Hirsch also suggested that some of these funds could be used to finance the legal defense of terrorists involved in the October 7 massacre, rather than being taken from public funds.
Despite the Knesset legislation, some of the funds still appear to have reached the PA. For example, in 2020-2021, Israel transferred around NIS 2.2 billion to the PA for containers destined for the PA, though Tax Authority data showed that most of these containers never made it to their intended destination.
In a recent development, Israel’s High Court of Justice issued a conditional order demanding an explanation from Finance Minister Bezalel Smotrich regarding the continued transfer of billions of shekels in taxes to the PA, despite apparent non-compliance with the law. The court has requested that Smotrich, the Tax Authority, and the Attorney-General’s Office clarify why these transfers are still occurring.
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