Taxes collected by Israel and bound for Gaza will be held in Norway, instead of being sent to the Palestinian Authority (PA), which exercises limited self-rule in the Israeli-occupied West Bank, according to a plan approved by Israeli officials.
“The frozen funds will not be transferred to the Palestinian Authority, but will remain in the hands of a third country,” said a statement released on Sunday by the Israeli prime minister’s office.
“The money or its consideration will not be transferred under any circumstances, except with the approval of the Minister of Finance of Israel, not even through a third party,” it said.
In line with a deal reached in the 1990s, Israel collects tax on behalf of the Palestinians and makes monthly transfers to the PA pending the approval of the Ministry of Finance.
While the PA was ousted from the strip in 2007, many of its public sector employees in the enclave kept their jobs and continued to be paid with transferred tax revenues.
But nearly a month after the October 7 attack – when Hamas fighters launched an unprecedented assault into southern Israel killing at least 1,139 people, according to an Al Jazeera tally based on Israeli statistics, and taking about 240 captives – Israeli authorities decided to withhold funds earmarked for the Gaza Strip.
In response to the money deduction, the PA refused to accept a partial transfer of money.
“Any deductions from our financial rights or any conditions imposed by Israel that prevent the PA from paying our people in the Gaza Strip are rejected by us,” said senior PA official Hussein al-Sheikh on X.
“We call on the international community to stop this behavior based on piracy and stealing the money of the Palestinian people and force Israel to transfer all of our money,” he added.
Nour Odeh, a political analyst based in Ramallah in the occupied West Bank, said Israel was using its leverage over the tax revenues to “punish” and “weaken” the PA.
“It’s a way for Israel to assert how much control it has on everything, including the PA’s ability to function. It’s not clear if the PA would be willing to accept conditions, because it would be humiliating to walk back its pledge to not take the revenues with the deduction of Gaza’s share of it,” she told Al Jazeera.
“[WIthholding the revenues] will have a huge impact because those employed by the PA won’t receive their salaries at a time when many are starving due to Israel’s siege and war – people need that money to survive.”
Far-right Israeli National Security Minister Itamar Ben-Gvir was the only member of the government to oppose the plan to send the funds to Norway.
Ben-Gvir said the plan does not guarantee that the money won’t be transferred to Gaza.
“Last week they started moving flour trucks and now they are making a decision that does not guarantee that the money will not reach the Nazis from Gaza,” the far-right leader said on X, adding that Prime Minister Benjamin Netanyahu was “constantly” moving “the red line”.
The issue has been a source of friction within the Israeli war cabinet, with Defense Minister Yoav Gallant calling for the funds to be distributed to maintain stability in the occupied West Bank.
Violence there has spiked since the start of the war amid nearly daily raids and mass arrest campaigns in cities and villages by Israeli forces.
Since then, at least 319 Palestinians have been killed by Israeli forces or settlers, according to UN figures, and more than 6,000 have been arrested, according to the Palestinian Prisoner’s Society advocacy group.
