Israel has agreed to release $470 million in Palestinian Authority (PA) tax fees it withheld for the months of March and April out of humanitarian concern for the Palestinians and following talks between the Coordinator of Government Activities for the Territories Maj.- Gen Yoav Mordechai and Palestinian officials.

Israel first froze the money in January to protest the PA’s decision to join the International Criminal Court so it could sue Israel for war crimes.

Israel collects about €120 million in taxes and customs each month on behalf of the PA and then transfers the sums to President Mahmoud Abbas’s government. The revenues account for more than two-thirds of the Palestinian budget.

Israeli Prime Minister Benjamin Netanyahu agreed last month to resume the payments, but only after sums were deducted to cover Palestinian debts to the Israeli electricity corporation and Israeli hospitals. Mr Abbas refused to accept the money since Israel had made its deductions unilaterally.

Top-level meetings last week resolved the standoff and it was agreed that Israel will turn over to the Palestinians the tax funds it collected on its behalf in March and April without any deductions. The Palestinian debts will be deducted from the rest of the payments and a joint committee will decide on debt reductions from future payments.

An Israeli government official said the transfer was a humanitarian gesture that will contribute towards regional stability. He said the move was one of a number of significant steps Israel has taken recently to improve the wellbeing of the Palestinian population.

“We are not fighting against the citizens of the PA [Palestinian Authority],” the official said. “It is important to us that the Palestinian residents live in comfort and dignity and we are open to any suggestions as to how to promote economic growth there.”

Nickolay Mladenov, the United Nations special co-ordinator for the peace process, welcomed the release of the tax revenues. “Withholding these revenues for over four months has undermined the stability of the Palestinian institutions. This agreement is an important step in the right direction for both sides.”

Releasing the funds is the latest in a series of gestures Israel has made to the PA in recent months, including the authorization of a water hook-up for the new Palestinian city of Rawabi.

Israel also will double water sales to the Gaza Strip, from 5 million cubic meters to 10 million cu.m. by putting online new pipes and infrastructure that have been ready for operation for the last few years. The ban on the sale of Gaza produce to Israel also has been eased for the first time since it was imposed in 2007. Also, for the first time since the signing of the Oslo Accords 20 years ago, Israel has just allowed armed and uniformed Palestinian policemen to operate in a number of communities surrounding Jerusalem.

Israel has also streamlined its admission policy for PA residents. Whereas formerly it took a PA resident several weeks to get an entry pass into Israel, the process has now been cut to hours.

Previously, each request was examined one at a time, and requests were forwarded to a central office, where they were processed and checked. Last September, a new computerized system was installed at checkpoints, with all records and data digitized, enabling security officials to check the status, record, and other important information associated with applicants.