Palestinian Authority receives $114 million from Israel, Norway says

Smoke rises during an Israeli ground operation in Khan Younis, amid the ongoing conflict between Israel and the Palestinian Islamist group Hamas, as seen from a tent camp sheltering displaced Palestinians in Rafah, in the southern Gaza Strip, February 29, 2024. REUTERS/Ibraheem Abu Mustafa

OSLO (Reuters) -The Palestinian Authority has received 407 million shekels ($114 million) from Israel with more funds on the way in the coming days following a deal to release frozen tax funds, the Norwegian government said on Thursday.

Norway on Feb. 18 said it had agreed to assist in the transfer of funds earmarked for the Palestinian Authority (PA) that were collected by Israel, providing crucial funding to the Western-backed entity.

“This money is absolutely necessary to prevent the collapse of the Palestinian Authority, to ensure that the Palestinians receive vital services, and that teachers and health workers are paid,” Norwegian Prime Minister Jonas Gahr Stoere said.

The PA exercises limited self-governance in the Israeli-occupied West Bank.

Under interim peace accords reached in the 1990s, Israel’s finance ministry collects tax on behalf of the Palestinians and makes monthly transfers to the PA. But a dispute broke out over payments in the wake of the Oct. 7 attack on Israel by Hamas from Gaza, a territory ruled by the Palestinian Islamist group.

Under the agreed solution, Norway serves as an intermediary, holding tax revenue equal to the portion that Israel estimates would have gone to Gaza, while the PA would receive the rest, the Nordic country has said.

($1 = 3.5697 shekels)

(Reporting by Terje Solsvik, editing by Gwladys Fouche and Mark Heinrich)