Israel transfers $1B to cash-strapped Palestinian Authority

Israel transferred over $1 billion in taxes and customs duties it collects on behalf of Palestinian Authority on Wednesday after a six-month hiatus in which Palestinians h severed ties with Israel over its plans to annex parts of occupied West Bank.

Palestinians resumed contacts with Israel last month following President-elect Joe Biden's victory in U.S. election. Biden is opposed to annexation and has promised a more evenhanded approach to conflict.

taxes are a key source of revenue for Palestinian Authority, which ministers parts of Israeli-occupied West Bank. It was forced to cut salaries it pays to tens of thousands of civil servants, worsening an ecomic crisis caused by coronavirus pandemic.

Hussein al-Sheikh, a close aide to Palestinian President Mahmoud Abbas, confirmed receipt of nearly 3.8 billion shekels (around $1.1 billion) from Israel. Israel's Finance Ministry said funds were transferred following approval of Israeli Security Cabinet last month.

Israel said it would deduct an amount equal to what Palestinian Authority pays to families of prisoners and those killed in conflict, including militants implicated in attacks that killed Israelis. Israel says so-called Martyrs' Fund incentivizes violence, while Palestinians say it provides aid to needy families.

President Donald Trump's Mideast plan, unveiled in January, would have allowed Israel to annex a third of West Bank, including all its Jewish settlements. Palestinians immediately rejected plan, and Abbas anunced in May that he was cutting all ties to U.S. and Israel, and would longer abide by past agreements with m.

Israel shelved its annexation plans in August after United Arab Emirates agreed to rmalize relations, but Israeli Prime Minister Benjamin Netanyahu said pause was only temporary.

Trump took unprecedented steps to support Israel and isolate Palestinians, including moving U.S. Embassy to contested Jerusalem, cutting off aid to Palestinians and ending deces of U.S. opposition to Israeli settlements, which Palestinians and much of international community view as a violation of international law.

Biden has vowed to restore aid to Palestinians and press both sides to resume long-moribund peace process, without providing much detail about his approach.