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Tel Aviv frees tax funds for Palestinian president

Palestinian President Mahmoud Abbas leaves a reception marking Armenian Christmas in the West Bank town of Bethlehem on Thursday. Israel said it would free US$100 million in frozen tax funds later on Thursday and send them to Abbas -- the first Israeli payment since the militant Hamas won legislative elections and took office last year. PHOTO: AP

Israel has been freeing US$100 million in frozen tax funds and sending them to Palestinian President Mahmoud Abbas, a boost before the moderate leader's crucial weekend talks in Damascus with the top Hamas leader about a unity government.

The transfer of funds, expected by yesterday morning according to an Israeli official, was to be the first such Israeli payment since the militant Islamic Hamas formed its government in March.

Abbas was to head to Syria to meet Hamas head Khaled Mashaal with the goal of forging a unity government to end a punishing international aid boycott.

The talks have sputtered for months amid deadly clashes between forces loyal to the two sides, killing 35 people. But the fact that the two leaders were meeting was a sign that an agreement might be finally at hand, though key obstacles remained.

The US$100 million is part of the tax money Israel collects for the Palestinian Authority under partial peace accords, including customs and value added tax.

Israel halted transfer of the funds when Hamas won control of the Palestinian parliament and set up its Cabinet in March last year.

Israel said it could not feed money to a Hamas-led government, labeling Hamas a terror group because of its history of dozens of suicide bombings against Israelis over the past decade, killing hundreds. The US and EU joined in the boycott, halting the foreign aid that has kept the Palestinian Authority afloat since it was created in 1994.

An Israeli official said the money would be transferred directly to Abbas for use in humanitarian efforts and to boost his own security force, the Presidential Guard. The official, speaking on condition of anonymity because the decision had not been made public, said Israel was satisfied by assurances that the money would not go to the Palestinian Finance Ministry, which is controlled by Hamas.

Palestinian negotiator Saeb Erekat, who is close to Abbas, welcomed the Israeli move but noted the money belonged to the Palestinians in the first place.

"We hope the Israelis will release all the withheld funds," he told reporters. "This is about 25 percent of the total they owe us."

Acting Finance Minister Samir Abu Aishah of Hamas said the government should decide how the money is spent.

"This is supposed to be spent according to Palestinian priorities. It is not for Israel to determine where it goes," he said.

Abbas was due in Damascus today, to meet Mashaal for the first time in years.

Nimer Hamad, an Abbas political adviser, confirmed the planned meeting, but said that two key obstacles to a coalition government remained -- Hamas reluctance to accept a political platform that implicitly recognizes Israel, and control of the Interior Ministry, which oversees the Palestinians' 85,000 security officers.
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