The cabinet has approved legalizing five West Bank outposts and a series of sanctions against the Palestinian Authority, according to a statement by Finance Minister Bezalel Smotrich.
There was no official word on the matter from the government beyond the minister’s statements. Neither the Prime Minister’s Office nor the cabinet secretary made any immediate comment.
In return for the measures, Smotrich will sign off on moves unfreezing tax funds withheld from the Palestinian Authority, the Haaretz daily reported. The hardline minister will also extend a waiver allowing Israeli banks to work with their Palestinian counterparts, it reported.
These moves were absent from the minister’s statement.
Smotrich in his statement said the move came “in light of Palestinian Authority action at the International Criminal Court, International Court of Justice, the UN, the [pending] arrest warrants against the country’s leaders and its push for unilateral recognition of a Palestinian state.”
The outposts set to be legalized are Evyatar in the northern West Bank, Sde Efraim and Givat Asaf in the central West Bank, and Heletz and Adorayim in the south of the territory.
The cabinet also okayed the publication of tenders for thousands more homes in settlements, according to the statement.
Among the steps proposed that Smotrich said would be taken against the PA were the cancellation of various benefits for officials; cancellation of exit visas for PA officials and restrictions on their movement; “enforcement action against incitement” by PA officials; and the transfer of enforcement responsibilities from the PA to Israel in a nature preserve in the Judean desert that right-wing groups — including one founded by the minister — claim has seen unbridled Palestinian building activity, damaging heritage sites and the environment.
Smotrich previously pledged to withhold funds collected by Israel on the PA’s behalf and allow the banks’ waiver to expire after June, until the Israeli government adopted a series of punitive measures against the PA for its lobbying against Israel in the global arena.
The lack of funds has further destabilized the floundering PA. An Israeli official told The Times of Israel this month that the government was interested in placating Smotrich so that he’d release some of the Palestinian tax revenues, a major point of contention between Jerusalem and Washington, and extend indemnity to Israeli correspondent banks.
The expiration of the waiver would severely hamper the West Bank economy, which is intrinsically dependent on Israel due to the power imbalance between the sides.
It’s unclear if the scheme will placate Washington, though. A US official said last week that the sides are liable to find themselves in the same situation a month or two down the line “if and when [Smotrich] decides to hold up the funds again.”
“These funds cannot continue to be held for ransom. They belong to the Palestinians,” the US official told The Times of Israel.
Not wanting to legitimize many of his hardline views regarding the Palestinians, the Biden administration has imposed an effective boycott of Smotrich, refusing to meet with him or fellow far-right cabinet minister Itamar Ben Gvir.
The Biden administration fears the collapse of the PA would lead to chaos in the West Bank that would be exploited by Hamas and Palestinian Islamic Jihad cells to open a new front to the war in Gaza, a second US official said last week.
Such a collapse would also scuttle US planning for postwar Gaza, where Washington hopes a reformed PA will eventually return, reuniting the West Bank and the Strip under one political entity and establishing a pathway to a future Palestinian state.
Meanwhile, the decision to legalize West Bank outposts was applauded by settler leaders overnight.
Yossi Dagan, head of the Samaria Regional Council, said in a statement it was a “Zionist decision and a strong message of victory.”
“The new settlement will complete a succession of settlements in the region,” said Yaron Rosenthal, the head of the Gush Etzion Regional Council.
Israel Gantz, head of the Binyamin Regional Council, cast the decision as a measure “that strengthens the State of Israel.”
But the Peace Now organization said the decision was “crazy” and damaged Israel’s relations with the US.
“Instead of worrying about the neglected residents of the south and the north, the settler government is giving a prize to criminals at the height of the war to satisfy Smotrich, who is collapsing in the polls,” the group said, referencing surveys showing his Religious Zionism party failing to enter the Knesset if elections were held.
“This is an illegitimate government that lost the faith of the people a long time ago and is being managed by a messianic, extremist minority that has to get out of our lives,” it added.
Jacob Magid contributed to this report.