World leaders have opposed Israel's decision to withhold nearly $90 million in tax revenue owed to Palestinian officials, in response to a recent unity deal with Hamas.
Yuval Steinitz, the Israeli finance minister, said last week he would suspend payment of customs duties and other taxes it collects on behalf of the Palestinian Authority (PA), which amounts to more than $1 billion (Dh3.67bn) in annual revenues for the West Bank's governing body.
He billed the move as a measure aimed at preventing the money from reaching Hamas, considered a terrorist organisation by Israel, the United States and European Union.
Hamas and Fatah, which controls the PA, have struck an agreement to end their four-year split that will form an interim government until Palestinian elections are held within a year.
In a telephone conversation on Friday with Israel's prime minister, Benjamin Netanyahu, the UN secretary general, Ban Ki-moon, asked Israel to release the money to the Palestinians. Mr Netanyahu has been a vociferous opponent of any Palestinian unity deal that includes Hamas.
Mr Ban, in a statement, "urged Israel to continue to transfer tax revenues to the Palestinian Authority".
His statement coincided with an announcement by the European Union to supply the PA with $124 million to compensate for the budgetary shortfall.
"It is important that access to essential public services remains uninterrupted and the right to social services is respected," Catherine Ashton, the EU foreign policy head, said in a statement. The advance, which would pay for salaries and aid to Palestinian families, was made at the request of the PA prime minister, Salam Fayyad.
Mr Fayyad is the primary architect of the Palestinians' drive for independence that is hoped to culminate in September with a UN endorsement of a Palestinian state.
The emergency financial assistance underscores that the international community is cautious about the Palestinian unity pact. It also signifies an apparent willingness to consider Hamas' participation in the deal.
While the Islamist group's founding charter calls for Israel's elimination, its Syria-based leader, Khaled Meshaal, has taken a softer tone since signing up to the agreement in Cairo last week.
The Hamas leader refused to formally renounce violence against Israel during a series of interviews with western media but he added the caveat that such violence would be carried out only after consultation with other Palestinian factions. He also has expressed tacit acceptance of Israel, repeating that his group prefers the "establishment of a Palestinian state within 1967 borders with Jerusalem as its capital, without settlers and without giving up the right of return" of Palestinian refugees.
The administration of US President Barack Obama has not formally opposed the reconciliation agreement - so long as its parties abide by the conditions set by the Middle East peace Quartet, which consists of the US, the EU, Russia and the UN.
The reiteration of these conditions, directed primarily at Hamas, include recognising Israel and abandoning violence against it, as well as adopting agreements previously agreed to by Israel and the Palestine Liberation Organisation.
The US secretary of state, Hillary Clinton, has suggested that the United States would wait to see how the reconciliation deal would affect peace negotiations with Israel and American aid to the PA.
The US-sponsored peace talks broke down in September after Israel declined to extend a partial freeze on Jewish settlement construction, a demand set by Mahmoud Abbas, the PA president.
"There are many steps that have yet to be undertaken in order to implement the agreement," Mrs Clinton told The New York Times in an article published on Thursday. "And we are going to be carefully assessing what this actually means, because there are a number of different potential meanings to it, both on paper and in practice."
Israel and members of the Quartet briefly imposed sanctions on the PA after Hamas swept the 2006 Palestinian legislative elections. The punishment included withholding Palestinian tax revenues collected and distributed by Israel.
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