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Israel may stop payments to Palestinian Authority

Israel has said that it might freeze payments after the Islamic Hamas group forms the next Palestinian government.

india Updated: Feb 06, 2006 11:18 IST

Israel has agreed to transfer $54 million in desperately needed tax money to the Palestinian Authority.

But said that it might freeze payments after the Islamic Hamas group forms the next Palestinian government.

Israel's monthly transfer of the taxes and customs duties it collects on behalf of the Palestinians is crucial to the functioning of the Palestinian Authority.

Halting the payments would deepen the government's financial crisis and add to international pressure on Hamas to renounce violence and recognise Israel before it takes power.

Israel also froze the transfer of the tax money last week because of Hamas' victory, forcing the Palestinian Authority to postpone paying January salaries to its 137,000 workers.

The Israeli Cabinet decided to transfer the money because Hamas was not yet in the government, Defence Minister Shaul Mofaz said on Sunday.

"If the government can ensure that the money will reach those who need it, there is no reason why we shouldn't transfer the money for the salaries.

"As long as there isn't a Hamas government ... We need to act logically," Mofaz told the Cabinet, according to a participant in the meeting.

The Cabinet said it would review the payments each month, but Cabinet minister Zeev Boim said the funds would be cut off if Hamas, which has killed hundreds of Israelis in suicide bombings, does not change its ways.

Mushir al-Masri, an incoming Hamas lawmaker from Gaza, termed Israel's payment freeze "theft" and said it should not "blackmail" Hamas.

Mohammed Abu Teir, another incoming Hamas lawmaker, said the group already has lined up $100 million in funding from an Arab country he declined to name.

First Published: Feb 06, 2006 11:18 IST