Donor nations promise $170 million to Palestinian Authority to offset tax revenues withheld by Israel

Donor countries meeting in New York on Thursday pledged to provide at least $170 million per month in emergency funds to the Palestinian Authority (PA) to offset tax revenues withheld by Israel. The donor nations include Germany, Spain, and Saudi Arabia.

According to the office of PA Prime Minister Mohammad Mustafa in Ramallah, the pledged funds will help the Palestinian Authority remain financially afloat. However, the pledged amount represents less than half of the $400 million per month for six months that the PA had originally requested.

Speaking on condition of anonymity, a European diplomat told The Times of Israel that France and Norway had joined the group of donor nations, which reportedly agreed to provide Ramallah with $200 million per month for six months. The donor states have warned that the PA is facing an “existential threat” due to the budget crisis.

“A viable Palestinian state capable of fulfilling the needs and aspirations of the Palestinian people will be essential for a future of peace and security in the Middle East,” the donors wrote in a joint letter. “We therefore need to urgently mobilize to prevent a financial collapse of the Palestinian Authority, with severe implications for Palestinian society, regional stability, and international security.”

“We need to act now, and with this objective, we propose to swiftly coordinate in the coming days an emergency coalition for Palestine,” the donors added.

Speaking to the AFP news outlet, PA spokesman Mohammad Abu Al-Rob said it was unclear whether the emergency funds would be renewed after the specified six months, arguing that Israel's withholding of tax revenues constitutes 68% of the PA’s total budget.

“Who can continue working while losing 60 percent? Which country can continue offering services?” Al-Rob said. According to him, PA-run schools in Judea and Samaria, internationally known as the West Bank, were only open three days per week.

The PA official also stated that the number of people living in poverty in PA-administered areas has increased by 150% since the Hamas Oct. 7, 2023, invasion and terror attack in southern Israel that resulted in the deaths of 1,200 Israelis.

The State of Israel has been withholding tax revenues from the PA because of Ramallah’s support for terrorism and its “pay-for-slay” policy, which provides financial incentives for the murder of Israelis and Jews. In addition, PA school textbooks promote hatred and glorify violence against Israel and the Jewish people.

In November 2023, just one month after the attack, a local poll revealed that a whopping 85% of the Arabic-speaking population in Gaza, Judea and Samaria supported the Hamas attack in Israel.

Saudi Arabia was once a major donor but had previously accused PA President Mahmoud Abbas of corruption and mismanagement. Its return as a donor nation now signals improved diplomatic ties between Riyadh and Ramallah.

In June 2024, the leaders of the Group of Seven (G7) leading industrialized nations called on Israel to stop weakening the Palestinian Authority.

“Actions that weaken the Palestinian Authority must stop, including the withholding of clearance revenues by the Israeli Government,” the G7 nations stated, adding, “Maintaining economic stability in the West Bank is critical for regional security.”

The G7 group consists of the United States, the United Kingdom, France, Germany, Japan, Italy and Canada.