GAZA CITY, Gaza Strip — Israel has agreed to suspend on Jan. 1 the Gaza Reconstruction Mechanism (GRM), a deal Palestinian contractors say has put many of them out of business and cost the Contractors Union millions of dollars a month, according to a representative of the new consensus government.

“We received a positive response from the Israeli government regarding our demand for the suspension of the GRM," Mufid al-Hasayneh, the minister of public works and housing for the new consensus government and a representative of the Palestinian presidency, told Al-Monitor.

"We were promised, as representatives of the consensus government, that this mechanism will no longer be adopted as of 2018," he said. "[In the meantime], technical and legal committees will be formed between the Palestinian consensus government and the Palestinian Contractors Union to distribute the shares of construction materials to contractors as part of the government's responsibility to compensate for the losses the private sector sustained under the GRM.”

On Nov. 1, the Palestinian Authority (PA) took over the Gaza Strip border crossings, which had been administered by Hamas. This step came within the scope of the Palestinian reconciliation agreement, signed Oct. 12 in Cairo. One of the PA's first decisions after taking control of the Rafah crossing on the Egyptian border was to stop imposing taxes Hamas had levied on goods entering the Gaza Strip.