Abbas says will reject reduced tax reimbursement from Israel

RAMALLAH: Palestinian president Mahmud Abbas said Wednesday he would not accept partial payment of tax transfers owed by Israel, which decided to withhold reimbursements in retaliation for payments to prisoners jailed for attacks.

"We shall not accept the (tax) money if it is not paid in full," Abbas told a central committee of the Palestine Liberation Organisation in Ramallah in the occupied West Bank.

Israel's security cabinet on Sunday approved the freezing of $138 million (122 million euros) over the Palestinian Authority's payments to prisoners jailed for attacks on Israelis.

Abbas also said he would not end financial support for the families of Palestinian attackers imprisoned or killed by Israel.

"Every penny available will be allocated to the families of martyrs and prisoners," he said.

The PA says the payments are a form of welfare to families who have lost their main breadwinner.

Many Palestinians view prisoners and those killed while carrying out attacks as heroes in their conflict with Israel. Palestinian leaders often venerate them as martyrs.

Israel alleges the payments encourage further violence.

Under a 1994 agreement, Israel collects around $190 million (170 million euros) each month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports. It transfers the money to the PA.

The $138 million in withheld money is to be deducted incrementally from monthly payments over a 12-month period.

Abbas said Israel's decision to withhold the funds was meant to pressure Palestinians to accept a peace deal being prepared by US President Donald Trump.

The US plans are to be formally presented after Israel's April 9 elections.

But the Palestinian Authority says it can no longer trust the United States as an honest peace broker after Trump in 2017 recognised Jerusalem as Israel's capital.

Israel claims Jerusalem as its "undivided" capital, while Palestinians view Israeli-annexed east Jerusalem as the capital of their future state.

The Palestinians are already contending with a cut of more than $500 million in annual aid by Trump's administration, mostly to the UN agency for Palestinian refugees.

The PA, which has limited sovereignty in parts of the occupied West Bank, relies heavily on external financial aid.