Photo Credit: Marc Israel Sellem / POOL
Israeli Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon at the weekly cabinet meeting in Jerusalem. (archive)

The State of Israel secretly transferred hundreds of millions of shekels to the coffers of the Palestinian Authority in order to prevent the collapse of the entity.

But the PA reversed the transaction and returned the money, according to Israel’s Hebrew-language Kann public broadcasting network.


Prime Minister Benjamin Netanyahu held an urgent meeting Sunday with outgoing Finance Minister Moshe Kahlon to discuss the crashing PA economy, according to the report.

During their meeting, government officials discussed their increasing concern that the Palestinian Authority might collapse entirely due to PA leader Mahmoud Abbas’ stubborn refusal to accept the tax revenues that were collected on behalf of the entity – which makes up more than half of its monthly budget – albeit minus the amount the PA had paid to terrorist prisoners in Israel, and the families of those killed while trying to murder Israelis, known as the Palestinian Authority’s “pay to slay” policy.

The Israeli Reduction Law, as it is called, was passed by the Knesset and approved by the government earlier this year. Israel subsequently announced the reduction of $138 million in monthly payments to the PA to offset the Palestinian Authority government’s payments to terrorists and their families.

In response, Abbas refused to accept any of the tax monies collected by Israel on its behalf, insisting that Israel transfer the entire sum, or none at all.