Yellen Concerned about Israel's Threats to Cut off Palestinian Banks

US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)
US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)
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Yellen Concerned about Israel's Threats to Cut off Palestinian Banks

US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)
US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)

US Treasury Secretary Janet Yellen said on Thursday she was concerned by a threat from Israel to cut off Palestinian banks from their Israeli correspondent banks, a move that would close a critical lifeline for the Palestinian economy.

Yellen told a news conference ahead of a G7 finance ministers meeting beginning on Friday that the US and its partners "need to do everything possible to increase humanitarian assistance to Palestinians in Gaza, to curtail violence in the West Bank, and to stabilize the West Bank's economy."

She said she would bring up the issue at the meeting of the Group of Seven industrial democracies in the lakeside resort town of Stresa in northern Italy. "I expect other countries to express concern about the impact of such a decision on the West Bank economy. I think this would have a very adverse effect also on Israel."

Israel's Finance Minister Belazel Smotrich has said he cannot renew a waiver that expires on July 1 which allows Israeli banks to process shekel payments for services and salaries tied to the Palestinian Authority, Reuters reported.

In a post on the X social media site reacting to Yellen's comments, Smotrich said he could not sign the waiver because Palestinians are still funding "terrorism" and Israeli banks can be sued for violating anti-terrorism financing laws.

"The financial system of the Palestinian Authority is infected with terrorism up to its neck," said Smotrich, a member of a far-right Israeli coalition partner that supports settlements in the West Bank. He called critics of the policy "hypocrites."

Yellen said it was important to keep open the Israeli-Palestinian correspondent banking relationships to allow battered economies in the West Bank and Gaza to function and help ensure security.

"These banking channels are critical for processing transactions that enable almost $8 billion a year in imports from Israel, including electricity, water, fuel, and food, as well as facilitating almost $2 billion a year in exports on which Palestinian livelihoods depend," Yellen said.

She added that Israel's withholding of revenues collected on behalf of the Palestinian authority also threatens the West Bank's economic stability.

"My team and I have also engaged directly with the Israeli government to urge action that would bolster the Palestinian economy and, I believe, Israel's own security," Yellen said.

Financial tensions between Israel and the US have risen over US sanctions imposed on Israeli settlers in the West Bank.



Justice or Assassination: Leaders React to Israel's Killing of Nasrallah

An Iraqi volunteer holds a picture of Lebanon's Hezbollah leader Hassan Nasrallah, who has been killed, in Basra, Iraq, on September 27, 2024. (Reuters)
An Iraqi volunteer holds a picture of Lebanon's Hezbollah leader Hassan Nasrallah, who has been killed, in Basra, Iraq, on September 27, 2024. (Reuters)
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Justice or Assassination: Leaders React to Israel's Killing of Nasrallah

An Iraqi volunteer holds a picture of Lebanon's Hezbollah leader Hassan Nasrallah, who has been killed, in Basra, Iraq, on September 27, 2024. (Reuters)
An Iraqi volunteer holds a picture of Lebanon's Hezbollah leader Hassan Nasrallah, who has been killed, in Basra, Iraq, on September 27, 2024. (Reuters)

World leaders warned of potential repercussions on Saturday after Lebanese armed group Hezbollah announced its longtime leader Hassan Nasrallah was killed in an Israeli air strike on a suburb of Beirut.

The killing of the Iran-backed group's chief has intensified fears of all-out war in the Middle East.

US President Joe Biden welcomed "a measure of justice".

- Iran -

First Vice President Mohammad Reza Aref warned Israel that Nasrallah's death would "bring about their destruction", Iran's ISNA news agency quoted him as saying.

The foreign ministry of Iran, which finances and arms Hezbollah, said Nasrallah's work will continue after his death. "His sacred goal will be realized in the liberation of Quds (Jerusalem), God willing," spokesman Nasser Kanani posted on X.

Supreme leader Ali Khamenei announced five days of public mourning.

- United States -

Biden said Nasrallah's death was "a measure of justice for his many victims, including thousands of Americans, Israelis and Lebanese civilians".

Washington supports Israel's right to defend itself against "Iranian-supported terrorist groups" and the "defense posture" of US forces in the region would be "further enhanced", Biden added in a statement.

Vice President Kamala Harris said Nasrallah was "a terrorist with American blood on his hands" and said she would "always support Israel´s right to defend itself against Iran and Iran-backed terrorist groups such as Hezbollah, Hamas, and the Houthis."

Leading Republicans in the House of Representatives also welcomed the end of a "reign of bloodshed, oppression, and terror" by "one of the most brutal terrorists on the planet".

- Russia -

Russia's foreign ministry said "we decisively condemn the latest political murder carried out by Israel" and urged it to "immediately cease military action" in Lebanon.

Israel would "bear full responsibility" for the "tragic" consequences the killing could bring to the region, the ministry added in a statement.

- Germany -

Foreign Minister Annalena Baerbock told ARD television that the killing "threatens destabilization for the whole of Lebanon", which "is in no way in Israel's security interest".

- Canada -

Canadian Prime Minister Justin Trudeau described Nasrallah as "the leader of a terrorist organization that attacked and killed innocent civilians, causing immense suffering across the region".

But he called for more to be done to protect civilians in the conflict, adding: "We urge calm and restraint during this critical time."

- Britain -

Foreign Secretary David Lammy said in a post on X that he had spoken with the Lebanese premier.

"We agreed on the need for an immediate ceasefire to bring an end to the bloodshed. A diplomatic solution is the only way to restore security and stability for the Lebanese and Israeli people," he said.

- France -

French Foreign Minister Jean-Noel Barrot demanded Israel "immediately stop its strikes in Lebanon" and said it was opposed to any ground operation in the country.

France also "calls on other actors, notably Hezbollah and Iran, to abstain from any action that could lead to additional destabilization and regional conflagration", the foreign ministry said in a statement.

- United Nations -

UN chief Antonio Guterres said he was "gravely concerned by the dramatic escalation of events in Beirut in the last 24 hours".

- Hamas -

Palestinian armed group Hamas, whose unprecedented October 7 attack on Israel sparked the devastating war in Gaza that drew in fellow Iran-backed groups including Hezbollah, called Nasrallah's killing "a cowardly terrorist act".

"We condemn in the strongest terms this barbaric Zionist aggression and targeting of residential buildings," Hamas said in a statement.

- Palestinian Authority -

Palestinian President Mahmud Abbas offered his "deep condolences" to Lebanon for the deaths of Nasrallah and civilians, who "fell as a result of the brutal Israeli aggression", according to a statement from his office.

- Houthis -

The Iran-backed Yemeni Houthis militias, who have been firing on ships in the Red Sea in solidarity with Hamas, said in a statement that Nasrallah's killing "will increase the flame of sacrifice, the heat of enthusiasm, the strength of resolve" against Israel, with their leader vowing Nasrallah's death "will not be in vain".

- Türkiye -

President Recep Tayyip Erdogan, whose country maintains diplomatic relations with Israel but who has been a sharp critic of its offensive in Gaza, said on X that Lebanon was being subjected to a "genocide", without referring directly to Nasrallah.

- Cuba -

In a post on X, Cuban President Miguel Diaz-Canel called the killing a "cowardly targeted assassination" that "seriously threatens regional and global peace and security, for which Israel bears full responsibility with the complicity of the United States."

- Argentina -

Argentine President Javier Milei reposted on X a message from a member of his council of economic advisers, David Epstein, who hailed the killing.

"Israel eliminated one of the greatest contemporary murderers. Responsible, among others, for the cowardly attacks in #ARG," it said. "Today the world is a little freer".

- Venezuela -

Venezuelan President Nicolas Maduro expressed solidarity with Nasrallah and Lebanon.

"They want to justify it, but to assassinate him, they attacked buildings, housing estates and killed hundreds of people. There's a word for this: crime."