The US is considering asking Israel to give some tax money it is withholding from the Palestinian Authority to Donald Trump’s Board of Peace to fund the US president’s post-war plan for Gaza, five sources familiar with the matter said.
The Trump administration has not yet decided whether to make a formal request to Israel, said three of the sources, officials with knowledge of US deliberations with Israel.
The two other sources, Palestinians with knowledge of the deliberations, said that under the proposal a portion of the tax money would go to a US-backed transitional government for Gaza and other funds to the PA if it makes reforms.
The PA puts the amount of tax being withheld at $5 billion.
The prospect of the Palestinians’ own tax money being repurposed toward Trump’s Gaza rebuilding plan, over which their government has had no input, could further sideline the Western-backed PA even as Israel’s withholding of the funds begets a financial crisis in the occupied West Bank.
The PA exercises limited self-rule in the West Bank but has not had any sway over Gaza since it was exiled from the territory after a brief civil war with Hamas in 2007.
Trump’s plan for Gaza, shattered after more than two years of war, has been held up by a refusal by Hamas to lay down their weapons and by continued Israeli attacks in Gaza that have undermined an October ceasefire.
The Board of Peace declined to comment on whether a proposal to use Palestinian tax money was under consideration.
A Board official said it had asked all parties to leverage resources to support Trump’s rebuild plan, estimated to cost $70 billion.
Israel collects taxes on imported goods on behalf of the PA and is meant to transfer the revenue under a longstanding arrangement.
The PA uses the funds to pay civil servants and fund public services.
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