Israel tells Palestinians $74 million dollars transferred

AP foreign
Monday June 9 2008
By MOHAMMED DARAGHMEH
Associated Press Writer

RAMALLAH, West Bank (AP) - Israeli officials said they have transferred millions of dollars in delayed tax revenue to the Palestinian authority, money that will help pay thousands of workers who have not received their May wages, the Palestinian prime minister said Monday.
Prime Minister Salam Fayyad said he was told the money was sent Saturday and that he expected it to come through by Tuesday.
Israel had agreed to transfer the tax revenue - about $74 million dollars - at the end of last month in an agreement between both sides. It will go toward the salaries of about 150,000 Palestinian civil servants who have not received their May wages.
The tax revenue is a sensitive matter for the moderate Fayyad, who needs to show Palestinians that their struggling economic conditions will improve by engaging with Israel.
Lee Gat, spokeswoman for Israeli Finance Minister Roni Bar-On, said Sunday the transfer was made during the past few days.
Fayyad staffers suspect Israel delayed the transfer deliberately after the prime minister called on the European Union to not upgrade relations with Israel while it expands settlements in the West Bank.
Palestinians want the territory for their future state and want Israel to halt settlement building as it negotiates a peace agreement with Palestinians.
Palestinian spokesman Riyad Malki called the delay on Monday "a punishment in response to a national stance taken by the government took.''
But Fayyad himself has stopped short of saying Israel was acting punitively, though he said Israeli officials said as much to local media.
"There were statements issued by some Israeli officials that linked the issue with the protest letter,'' Fayyad said while on a visit to high schools in the West Bank city of Ramallah. He declined to comment further.
The letter was an unusual move for the normally discreet leader and upset Israeli Prime Minister Ehud Olmert, who expressed his "grave concern'' over the matter.
Israel has strong trade relations with the EU and is looking for closer cooperation in research and political and economic areas. Israel also is seeking membership in the 30-member OECD, which champions democracy and free market economy.
The rival Palestinian government in the Gaza Strip ruled by the militant group Hamas and boycotted by international aid donors, has paid the May salaries of its 20,000 staff. Hamas obtains its funds through smuggled cash, some of it originating from Iran and from ad-hoc taxation of Gaza residents.

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