Half of the crisis in Israel’s relationship with the Palestinian Authority (PA) is behind us, but a comprehensive solution will have to wait until after the Sept. 17 elections. One thing is clear: In the final analysis, Palestinian President Mahmoud Abbas has defeated Israel. On Aug. 22, Israel transferred some NIS2 billion ($570 million) to the PA on the advice of its security agencies in light of the economic crisis in the West Bank.

A short reminder: The PA has refused in recent months to accept various taxes that Israel collects on its behalf (VAT, customs duties, fuel taxes) to protest Israel’s decision earlier this year to withhold some of these funds in order to punish the PA for its financial support of Palestinian terrorists and their families. So far, Israel has accrued NIS3 billion ($850 million) that the PA has refused to accept. Abbas’s insistent stand that he would accept all the money owed or none at all had led the PA to the verge of collapse, with Israeli security officials warning the political echelons that the coordination with the PA’s intelligence and police forces was under threat. Acting on the recommendations of security experts, the government sought a way out of implementing the so-called “deduction” law, but Abbas refused to fold. Finance Minister Moshe Kahlon met with his PA counterpart Shukri Bishara in an effort to resolve the crisis, to no avail.

Israel’s final offer to the PA was one it could not turn down. It released the PA from some of its commitments to Israel under the 1994 Paris Protocol, allowing the PA to impose taxes on the fuel it sells the Palestinians. According to the arrangement formulated jointly by Kahlon and PA Minister for Civilian Affairs Hussein Al-Sheikh, with Prime Minister Benjamin Netanyahu’s OK and the recommendations of the security agencies, Israel has now exempted the PA from paying tax on the fuel it buys from Israel, even applying the exemption retroactively to the past seven months. For the PA this is a win-win outcome — it can now buy fuel without paying taxes and impose taxes on Palestinian consumers in the West Bank.

That is not all. Israel has given the Palestinians an explicit promise that after the September elections, and assuming that Kahlon keeps his job in Israel’s next government, creative solutions would be found to transfer the rest of the PA funds that Israel is holding. According to a source in Israel’s Civil Administration, various ideas are being explored to end the crisis, including a reopening of the Paris Protocol and various tax exemptions for the PA.