Israel to Withhold Tax Transfers to Palestinians Over UN Bid

Posted December 2nd, 2012 at 8:50 am (UTC-5)
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Israel says it will withhold more than $100 million in taxes and tariff funds it collects on behalf of Palestinians to punish them for their successful bid to win United Nations statehood.

Sunday's move came as cheering crowds welcomed Palestinian president Mahmoud Abbas back to the West Bank city of Ramallah following his diplomatic victory last week when the Palestinians won non-member state observer status at the U.N. General Assembly.

Mr. Abbas proclaimed, “Yes, now we have a state” as he addressed the gathering.

Israeli Finance Minister Yuval Steinitz said Sunday the government would use the money it was to transfer to the Palestinians to pay down their debt to Israel's electricity company and other Israeli bodies.

Also Sunday, the Israeli cabinet unanimously passed a resolution rejecting the U.N. decision to upgrade the Palestinian's U.N. status. The cabinet said it would not negotiate on the basis of the General Assembly's recognition of a state of Palestine in the West Bank, East Jerusalem and Gaza Strip.

This was the second act of reprisal by Israel. On Friday, Israel announced it would press ahead plans to build thousands of settler homes in the occupied West Bank.

The U.N. vote was approved over fierce opposition from Israel and the United States.