Israeli officials announced on Friday that a far-right minister had tentatively agreed to release frozen funds to the financially struggling Palestinian Authority in exchange for bolstering Israeli settlements in the West Bank. Bezalel Smotrich, the hard-line finance minister, has been withholding funds from the Palestinian Authority and threatening Israeli banks that deal with Palestinian ones. In a late-night meeting, cabinet ministers agreed to retroactively authorize five Israeli settlement outposts in the West Bank to appease Smotrich. The international community considers Israeli settlements in the West Bank illegal, but authorizing these outposts would allow them to expand legally.
As the economic crisis in the West Bank worsens, with many left unemployed due to the ongoing conflict, Smotrich’s actions have raised concerns. The Biden administration is worried about the impact of a potential economic crash in the West Bank on postwar Gaza and the overall stability of the region. The Palestinian Authority has been struggling to pay its debts amid decreasing international aid, further complicating the situation.
The Palestinian Authority’s future remains uncertain as Smotrich continues to exert pressure on them, highlighting the complex political and economic dynamics at play in the region.