Israel likely to freeze Palestinian tax payments

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Israel likely to freeze Palestinian tax payments

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In a potential body blow to the cash-strapped Palestinian Authority, Israel said it expects to suspend monthly tax payments after the shock election victory of Islamic militants Hamas.

Israeli Foreign ministry spokesman Mark Regev said: “The review, at the moment, is ongoing. But pending a final decision, and a final decision hasn’t been reached, I think it’s fair to presume that Israel will not be automatically transferring funds to the Palestinian Authority.” Under the Oslo Peace Accord, Israel collects customs revenue on behalf of the Palestinians and hands it over to the Authority. The next automatic payment of about 36 million euros is due on Wednesday. Following a meeting of the quartet of major powers trying to broker peace in the Middle East, United Nations Secretary General Kofi Annan said on Tuesday: “The quartet concluded that it was inevitable that future assistance to any new government would be reviewed by donors against that government’s commitment to the principles of non-violence, recognition of Israel and the acceptance of previous agreements and obligations, including the road map.” Hamas has rejected as “blackmail” the quartet’s demands it renounces violence against Israel or risk losing money. A spokesman said the decision punished the Palestinian people for using what he described as their freedom of choice in a democratic and fair election.