ISRAEL agreed last night to transfer hundreds of millions of dollars to Palestinian Authority President Mahmoud Abbas’s emergency government, a measure designed to undercut Hamas Islamists controlling the Gaza Strip.
The money, Palestinian tax revenues withheld by Israel since Hamas came to power in an election last year, is part of an initial package to bolster Mr Abbas that Israeli Prime Minister Ehud Olmert is likely to announce at a summit in Egypt tonight.
Israel wants to isolate Hamas economically, diplomatically and militarily in Gaza, which the Islamist group seized control of more than a week ago, while allowing funds to flow to Mr Abbas’s Fatah administration in the West Bank.
The boost to Mr Abbas before tonight’s summit at the resort of Sharm el-Sheikh came as Palestinian intelligence chief Tawfiq al-Tirawi said Iran had played a “big role” in Hamas’s seizure of Gaza.
The withholding of the tax receipts over the past 15 months – now totalling $US700 million ($827million) – sparked a financial crisis for the Palestinian Authority, leaving it largely unable to pay its staff or contractors.
“We have taken a decision in principle to release the money,” Mr Olmert’s spokeswoman Miri Eisin said.
“We will discuss with the Palestinian President tomorrow, and with the Palestinian Government in the summit’s aftermath, how we release thefunds.”