Israeli threat to withhold taxes to damage Palesti

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[b]Israeli threat to withhold taxes to damage Palestinian economy: analysts[/b]
Israel's reaction to the [url=http://www.crystal-lightbase.com/]Glass blank block[/url] Fatah- Hamas reconciliation continued this week as Israeli Finance Minister Yuval Steinitz threatened to withhold taxes collected by Israel on behalf of the Palestinian National Authority (PNA) over fears that Hamas may use the money to fund its actions against Israel.
Palestinian movements Fatah and Hamas announced last Wednesday an Egyptian-brokered reconciliation deal, which outlined the creation of a unity government and preparations for national and presidential elections.
Local analysts said the Palestinian economy would face dire consequences due to its dependence on the taxes, although withholding the taxes is against the international law, adding that if the U.S. also decided to suspend its aid to the Palestinians, other countries in the region would step in.
SIGNED AGREEMENTS
Arie Arnon from the department of economics of Ben-Gurion University said that the blow to the Palestinian economy is severe since "it's quite a significant part of its (the Palestinians') income."
According to the Oslo Accords [url=http://www.crystal-lightbase.com/]Glass blank block[/url] signed in 1993, Israel collects import and export taxes on behalf of the PNA as it remains in control of the border crossings. The funds, in this case 88 million U.S. dollars, are then transferred on a regular basis to the Palestinians.
Arnon said the scale of the damage depends on how long Israel would withhold the money, as the taxes are, according to the agreement, supposed to be transferred several times per year, "the longer the transfer is suspended, the more difficult it is to deal with the effects."
"It has happened before. In the past, when such measures were taken by the Israeli authorities, the international community would step in and cover the funds," added Arnon.
When Hamas won the Palestinian parliamentary elections in 2006, Israel froze around 1 billion dollars, putting the PNA in a serious financial crisis.
"What it reveals is how the Palestinian economy is dependent on [url=http://www.crystal-lightbase.com/]Glass blank block[/url] Israel. It isn't a healthy long-term relationship," Arnon said.