Israel Agrees to Transfer Frozen Taxes to Palestinians ; WORLD

By Eric Silver

Israel agreed yesterday to release $350m ([pound]175m) in blocked tax revenues to the emergency West Bank government of Salam Fayyad.

The taxes were frozen in January 2006 after the election of Hamas, which has refused to recognise the state of Israel. Palestinian officials say Israel owes them as much as $700m.

The Israeli move was announced on the eve of a summit today in the Egyptian Red Sea resort of Sharm el-Sheikh between the Israeli Prime Minister Ehud Olmert, the Palestinian President Mahmoud Abbas, President Hosni Mubarak of Egypt, and King Abdullah of Jordan. It aims to bolster the pragmatic West Bank government in its confrontation with the Hamas administration in the Gaza Strip.

“We must try to make the most of recent developments in the Palestinian Authority,” Mr Olmert said. Among measures contemplated, an Israeli spokesman hinted, were removal of some checkpoints from West Bank roads and freer access to Israeli markets for Palestinians.

Sa’eb Erakat, Mr Abbas’s chief peace negotiator, said: “The Israelis should release all our money. These are Palestinian, not Israeli funds.” Fawzi Barhoum, a Hamas spokesman, said: “Is Israel releasing the money for free? No. It is in return for Abbas destroying Hamas and the resistance.”

Oxfam condemned the ongoing blockade of the Gaza Strip, which it said was leaving 1.3 million Palestinians on the brink of a humanitarian crisis.

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