Full Breakdown
Israel Withholds Palestinian Clearance Funds Amid Ongoing Fiscal Dispute
4/28/2026, 11:21:20 AM
April 2026 Withholding of Clearance Revenues
In April 2026 Israel collected NIS 740 million in taxes and customs duties on goods destined for the Palestinian Authority (PA). Approximately NIS 590 million was deducted to settle the PA’s debts to the Israel Electric Corporation, water utilities and environmental agencies, while the remaining balance was frozen and not transferred to the PA’s treasury.
Background: Oslo Accords and Prior Deductions
Under the 1990s Oslo Accords, Israel collects clearance revenues on behalf of the PA and is required to remit them. Since 2019 Israel has routinely deducted amounts to offset PA payments to Palestinian security prisoners, families of attackers, and unpaid utility bills. Finance Minister Bezalel Smotrich intensified the policy after the October 7, 2023 Hamas attack, linking deductions to the PA’s legal actions against Israel in international courts.
Financial Scale and Immediate Effects
The April 2026 deduction represents roughly 80 % of the month’s total collection. Clearance revenues constitute about 60 % of the PA’s overall budget; the latest freeze leaves the PA unable to meet payroll obligations, with employees receiving only NIS 2,000 for January salaries. The PA has estimated that Israel has withheld roughly NIS 13 billion (? US $4.4 billion) in clearance funds since the policy began, deepening a cash-flow crisis across West Bank ministries and public services.
Israeli Government Position
The Finance Ministry states the remaining funds are frozen “due to the minister’s policy not to transfer funds to the Palestinian Authority in light of its actions against the State of Israel in the international arena and its support for incitement to terrorism.” Smotrich’s office argues the deductions “cover outstanding debts” and prevent any shekel “meant to encourage terror” from reaching the PA. The Trump administration has urged Israel to release the funds, but Prime Minister Benjamin Netanyahu has not raised the issue in cabinet meetings.
Palestinian Authority Criticism
Prime Minister Mohammad Mustafa described the measures as “another form of occupation,” asserting that the “intensity of the cuts has increased over the past 12 months.” He warned that the withholding has left the PA “cash-strapped,” unable to pay public-sector salaries and to fund essential services in the West Bank and East Jerusalem.
Conflicting Reports and Gaps
Sources differ on the exact amounts deducted: Israeli statements cite NIS 590 million, while other reports reference roughly US $200 million. The total withheld is variously reported as NIS 13 billion and US $4.4 billion, without independent verification. Details on the frozen balance’s composition and the timeline for potential release remain unclear.
Verbatim Quotes
- “not a single shekel meant to encourage terror is transferred,” — Bezalel Smotrich, Finance Minister
- “The occupation has been cutting our funds for years, but the intensity of the cuts has increased over the past 12 months.” — Mohammad Mustafa, PA Prime Minister
- “These deductions have escalated over the past 12 months, as Israel has not transferred any tax and customs revenues to the Palestinian treasury,” — Mohammad Mustafa, PA Prime Minister
- “have been frozen for about a year due to the minister’s policy not to transfer funds to the Palestinian Authority in light of its actions against the State of Israel in the international arena and its support for incitement to terrorism.” — Israeli Finance Ministry statement
Outlook and International Involvement
U.S. officials continue to press for the release of the PA’s clearance revenues, while Smotrich has warned he will resign if forced to reverse the policy. Netanyahu’s reluctance to bring the issue before the cabinet suggests the withholding may persist unless diplomatic pressure yields a negotiated settlement.
