Israel and the Palestinian Authority have reached an agreement to resolve a monthslong dispute over the transfer of tax revenue Israel collects on behalf of the Palestinians, officials said on Saturday.
Israel said it would transfer about $470 million collected over the last four months, after deductions to help cover Palestinian debts to Israeli utility companies, according to a statement from the government. The amounts to be deducted had become a major sticking point in recent weeks.
The money had accrued since Israel suspended the payments in January in response to the Palestinian move to join the International Criminal Court. The Palestinians formally became a member of the court on April 1. The withholding of the money, which makes up a significant portion of the operating budget of the Palestinian Authority, caused a severe economic crisis, with the authority able to pay its tens of thousands of employees only partial salaries.
Israel announced in March that it would release three months of tax revenue — under international pressure and on the recommendation of Israeli security officials — amid fears that the impoundment of the money was undermining stability and endangering Israel’s well-being. But President Mahmoud Abbas of the Palestinian Authority refused to accept the transfer because Israel had unilaterally decided to deduct more money than usual to cover Palestinian debts for electricity, water and health services.
The state-owned Israel Electric Corporation said in February that the Palestinian debt to it had reached about $490 million.
While both sides said Saturday that the issue had been resolved, there were differences in how they presented the agreement, which was reached Friday night.
Israel said that a larger-than-usual amount would be deducted from the tax money collected in December, January and February, while deductions from tax revenue for March and April would revert to the regular amounts. It added that there would be further discussion about the debts and obligations of each side.
But Mr. Abbas told Palestinian leaders meeting in Ramallah on Saturday that Israel would release the tax revenue in full.
“The Israeli government has agreed to hand over the total amount of the tax revenues, amounting to almost half a billion dollars, and to form a joint Palestinian-Israeli committee tasked with reviewing all debts,” he said, according to Wafa, the official Palestinian news agency.
Mr. Abbas added that the Palestinian Authority would pay its public servants their April wages in full. The money was expected to be transferred in the coming days.
Nickolay Mladenov, the United Nations special coordinator for the Middle East peace process, welcomed the agreement, saying in a statement that it was “an important step in the right direction for both sides.”
The agreement came after months of tension between Israel and the Palestinian Authority and the collapse of American-brokered peace negotiations last year. Israel denounced the Palestinian decision to join the International Criminal Court as a violation of previous agreements.
Israel has withheld the tax revenues several times in past years, usually for a matter of weeks, to sanction the Palestinians. Palestinian officials have called the action “piracy.”
