Norway mediates ‘imminent’ deal to transfer tax funds between Israel and Palestine

An agreement to unfreeze tax funds earmarked for the Palestinian Authority (PA) that are held by Israel is “imminent”, Norway’s prime minister, whose country is working as an intermediary, said on Saturday.

Under interim peace accords reached in the 1990s, Israel’s finance ministry collects tax on behalf of the Palestinians and makes monthly transfers to the PA. But no payments have taken place since November following the outbreak of war between Israel and Hamas militants based in the Gaza Strip in October.

On Jan. 21, Israeli officials said the cabinet had approved a plan for frozen tax funds earmarked for the Gaza Strip to be held by Norway instead of transferred to the PA.

“I would say that the talks have been concluded and we are very close to settling an arrangement,” Prime Minister Jonas Gahr Stoere told Reuters in an interview, saying he believed they had been able to forge a compromise.

Accessing this revenue is key to the survival of the PA, which exercises limited self-rule in the Israeli-occupied West Bank.

Several Western countries, including the United States, want the PA to play a role in the administration of the Gaza Strip, should the war come to an end.

“I think we are trusted by the parties to manage financial support to the PA in a responsible way,” he said. “It has taken a lot of diplomatic work between Norway, the PA, Israel, the US, but I will say that we are very close, imminent.”

Norway is part of an international effort to build a broad, Palestinian unity government, with Western nations aiming for the PA to play a key role in it.

The country served as a facilitator in the 1992-93 talks between Israel and the Palestine Liberation Organization that led to the Oslo Accords in 1993.

It has remained involved as chair of the donor group coordinating international assistance to the Palestinian territories, the Ad Hoc Liaison Committee (AHLC).

Since Israel has stepped up strikes on Gaza in its war against Hamas, there has been interest to revive the AHLC as a possible channel for diplomacy.

Stoere said there were consultations to assess when it would be the right time to call another meeting, but the priority was getting humanitarian aid into the enclave.

“We believe that seeing the PA fail and go broke is in no one’s interest. It would be a disaster for Palestinians and it would be also very bad for Israel’s security,” he said.