RAMALLAH, West Bank — Following months of speculation about the possible economic collapse of the Palestinian Authority (PA), a sequence of recent events has infused much-needed funds into its treasury, with the prospect of more to come. Of note, the PA and Israel on Oct. 3 agreed to reactivate joint technical committees to discuss outstanding issues between them. The Palestinian leadership also agreed to accept an Israeli transfer of tax revenues collected on the PA's behalf and pushed for revisiting the Paris Economic Protocol, the 1994 agreement outlining economic relations with Israel.
The Palestinians' economic crisis stems in part from cuts in aid by the Donald Trump administration and the Israeli cabinet's Feb. 17 decision to deduct 502 million shekels ($138 million) from PA tax revenue, an amount said to be equivalent to the sum the PA disbursed in 2018 to the families of Palestinian prisoners in Israeli jails and Palestinians killed in attacks against Israelis. The withholding of funds prompted Palestinian President Mahmoud Abbas to announce on Feb. 19 that he would refuse all tax transfers from Israel if any part of them was withheld.