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Arab World

Israel to Use Withheld Palestinian Tax Income to Pay Electric Co Debt

Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)
Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)
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Israel to Use Withheld Palestinian Tax Income to Pay Electric Co Debt

Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)
Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)

Israel plans to use tax revenue it collects on behalf of the Palestinian Authority to pay the PA's nearly 2 billion shekel ($544 million) debt to state-run Israel Electric Co (IEC), Finance Minister Bezalel Smotrich said on Sunday.

Israel collects tax on goods that pass through Israel into the occupied West Bank on behalf of the PA and transfers the revenue to Ramallah under a longstanding arrangement between the two sides.

Since the Hamas-led attack on Israel on Oct. 7, 2023, triggered the war in Gaza, Smotrich has withheld sums totaling 800 million shekels earmarked for administration expenses in Gaza.

Those frozen funds are held in Norway and, he said at Sunday's cabinet meeting, would instead be used to pay debt owed to the IEC of 1.9 billion shekels, Reuters reported.

"The procedure was implemented after several anti-Israeli actions and included Norway's unilateral recognition of a Palestinian state," Smotrich told cabinet ministers.

"The PA's debt to IEC resulted in high loans and interest rates, as well as damage to IEC's credit, which were ultimately rolled over to the citizens of Israel."

The Palestinian Finance Ministry said it had agreed for Norway to release a portion of funds from an account held since last January with 1.5 billion shekels, calling money in the account "a punitive measure linked to the government’s financial support for Gaza.”

The ministry said as part of the deal, 767 million shekels of the Norwegian-held funds will pay Israeli fuel companies for weekly fuel purchases over the coming months. A similar amount will be used to settle electricity-related debts owed by Palestinian distribution companies to IEC.

Smotrich has been opposed to sending funds to the PA, which uses the money to pay public sector wages. He accuses the PA of supporting the Oct. 7 attack in Israel led by Hamas, which controlled Gaza. The PA is currently paying 50-60% of salaries.

Israel also deducts funds equal to the total amount of so-called martyr payments, which the PA pays to families of militants and civilians killed or imprisoned by Israeli authorities.

The Palestinian finance ministry said 2.1 billion shekels remain withheld by Israel, bringing the total withheld funds to over 3.6 billion shekels as of 2024.

Israel, it said, began deducting an average of 275 million shekels monthly from its tax revenues in October 2023, equivalent to the government’s monthly allocations for Gaza.

"This has exacerbated the financial crisis, as the government continues to transfer these allocations directly to the accounts of public servants in Gaza," the ministry said.

It added it was working with international partners to secure the release of these funds as soon as possible.

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Arab World

Obstacles Cloud Prospects for Safe Exit of Some Hamas Leaders from Gaza

A Palestinian girl sells chocolate bars at a market in Khan Younis, southern Gaza Strip, on Friday. (AP)
A Palestinian girl sells chocolate bars at a market in Khan Younis, southern Gaza Strip, on Friday. (AP)
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Obstacles Cloud Prospects for Safe Exit of Some Hamas Leaders from Gaza

A Palestinian girl sells chocolate bars at a market in Khan Younis, southern Gaza Strip, on Friday. (AP)
A Palestinian girl sells chocolate bars at a market in Khan Younis, southern Gaza Strip, on Friday. (AP)

Plans to allow a “safe exit” for some Hamas leaders and activists from Gaza are faltering amid strict Israeli conditions and unresolved demands tied to the full implementation of the ceasefire agreement’s second phase, notably disarmament and the handover of control in the enclave to a technocratic committee.

Three Hamas sources told Asharq Al-Awsat days ago that there was concrete movement to prepare lists of prominent leaders and activists, including prisoners freed in the 2011 Gilad Shalit prisoner exchange, in preparation for travel and departure from Gaza under an agreement with mediators and the United States.

A senior Hamas leader later denied those reports, saying the issue had not been formally raised, while another source said he was unaware of such discussions.

Hurdles and conditions

Sources within Hamas told Asharq Al-Awsat that after lists were prepared for figures at various leadership levels, as well as activists and freed prisoners, obstacles began to emerge that could prevent the move from succeeding.

They said Israel is conditioning the departure of any Hamas leader on the complete disarmament and dismantling of the movement.

According to the sources, a delegation from Hamas leadership inside Gaza had been expected to travel to Cairo to discuss issues related to the group’s weapons and security apparatus.

The trip was later canceled, and the information will instead be passed to Hamas leaders abroad to relay to the mediators.

The sources said the Gaza delegation was expected to hold in-depth and detailed talks on unresolved issues related to the second phase, as well as the fate of the last Israeli hostage’s body in the enclave.

Despite this, some sources said that several prisoners freed in the Shalit exchange are in fact preparing for the possibility of traveling in the coming period from Gaza to Egypt and then immediately to a third country.

Expected meeting

The dispute over this issue comes as a plan proposed by US envoy Jared Kushner on Gaza indicated that some Hamas activists could receive pardons, be reintegrated into a new police force following strict security screening by Israel or the United States, or be allowed safe passage out of the territory.

Israel’s i24NEWS reported that a draft comprehensive agreement on the second phase would soon be discussed between US envoy Steve Witkoff and Hamas leader in Gaza Khalil al-Hayya.

The talks would address the group’s weapons by distinguishing between heavy and light arms, and would grant amnesty to fighters who surrender their guns. At the same time, Hamas would hand over maps of its tunnel network and weapons production sites.

Senior Hamas leaders and activists would then begin leaving the Gaza Strip.

Hamas sources told Asharq Al-Awsat that, as of Saturday, there is no confirmed plan to hold such a meeting. They said the issue of weapons and the requirements of the second phase remain under discussion between Hamas leadership and the mediators, including the United States.

Arab World

Iraq Majority Bloc Backs Nouri Al-Maliki as Next PM

A general view shows al-Firdous Square in Baghdad, Iraq July 27, 2022. (Reuters)
A general view shows al-Firdous Square in Baghdad, Iraq July 27, 2022. (Reuters)
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Iraq Majority Bloc Backs Nouri Al-Maliki as Next PM

A general view shows al-Firdous Square in Baghdad, Iraq July 27, 2022. (Reuters)
A general view shows al-Firdous Square in Baghdad, Iraq July 27, 2022. (Reuters)

Iraq's main Shiite alliance, which holds a parliamentary majority, endorsed on Saturday former prime minister and powerbroker Nouri al-Maliki as the country's next premier.

The nomination effectively guarantees Maliki, 75, the post that he last held more than a decade ago.

The shrewd politician is set to return to power today amid seismic changes in the Middle East, with Tehran's regional influence waning and tensions with Washington rising.

The Coordination Framework, an alliance of Shiite factions with varying links to Iran, said in a statement that it "decided, by majority vote, to nominate" Maliki for the position "as the candidate of the largest parliamentary bloc".

The statement spoke of Maliki's "political and administrative experience and his record in running the state."

After Iraq's November general election, the Coordination Framework, which includes Maliki, formed the majority bloc.

Soon after, it held heated talks to choose the next prime minister, along with other discussions with Sunni and Kurdish parties regarding other posts.

Iraq's parliament chose a speaker last month and should convene next to elect a new president, who will then appoint a prime minister to replace the incumbent Mohammed Shia al-Sudani.

By convention in Iraq, a Shiite holds the powerful post of prime minister, a Sunni is parliament speaker, and the largely ceremonial presidency goes to a Kurd.

Maliki, has long been a central figure in Iraq's politics and its only two-term prime minister (2006-2014) since the US invasion of 2003, which ended decades of rule by President Saddam Hussein.

- Hard task -

Maliki, leader of the State of Law Coalition, has increased his power and influence despite his controversial past, including widespread accusations of stoking sectarian tensions, and failing to stop the ISIS group in 2014.

He has been involved in forming alliances and his name was regularly put forward as a possible candidate for the premiership.

Seen as close to Iran, Maliki also has a record of coordinating with the US on Iraqi politics, particularly during his previous terms.

In a country that has for decades been a proxy battleground between the US and Iran, Maliki will likely face a daunting task as government formation has always been influenced by the two foes.

He will be expected to address Washington's longstanding demand that Baghdad disarm Tehran-backed factions, many of which are designated terrorist groups by the US.

Iraqi officials and diplomats told AFP last month that Washington had demanded that the eventual government exclude Iran-backed armed groups and instead move to dismantle them.

But most of these groups hold seats in parliament and have seen their political and financial clout increase.

Arab World

Gaza Civil Defense Says Israeli Strike Kills Two Teenagers

Palestinian Hadeel al-Zawarah (front), 33, mother of Salman, 13-years-old is comforted by Asma Al-Zawra, 37, mother of 15-year-old, Mohammed, as they both grieve over the bodies of their sons killed in an Israeli drone strike, at the morgue of the Al-Shifa Hospital in Gaza City, on January 24, 2026. (AFP)
Palestinian Hadeel al-Zawarah (front), 33, mother of Salman, 13-years-old is comforted by Asma Al-Zawra, 37, mother of 15-year-old, Mohammed, as they both grieve over the bodies of their sons killed in an Israeli drone strike, at the morgue of the Al-Shifa Hospital in Gaza City, on January 24, 2026. (AFP)
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Gaza Civil Defense Says Israeli Strike Kills Two Teenagers

Palestinian Hadeel al-Zawarah (front), 33, mother of Salman, 13-years-old is comforted by Asma Al-Zawra, 37, mother of 15-year-old, Mohammed, as they both grieve over the bodies of their sons killed in an Israeli drone strike, at the morgue of the Al-Shifa Hospital in Gaza City, on January 24, 2026. (AFP)
Palestinian Hadeel al-Zawarah (front), 33, mother of Salman, 13-years-old is comforted by Asma Al-Zawra, 37, mother of 15-year-old, Mohammed, as they both grieve over the bodies of their sons killed in an Israeli drone strike, at the morgue of the Al-Shifa Hospital in Gaza City, on January 24, 2026. (AFP)

Gaza's civil defense agency said Israeli forces killed two teenagers in a drone strike on Saturday, while the military said it eliminated two "terrorists" who planted an explosive device near troops.

The civil defense agency, which operates as a rescue service under Hamas authority, said the drone killed the two near Kamal Adwan Hospital in Beit Lahia, in northern Gaza.

The territory's Al-Shifa Hospital said it received the two bodies, adding they were two boys aged 13 and 15.

The military said the pair had posed an "immediate threat" to its soldiers.

"Earlier today... troops operating in the northern Gaza Strip identified several terrorists who crossed the Yellow Line, planted an explosive device in the area, and approached the troops, posing an immediate threat to them," the military said in a statement.

Under a US-brokered ceasefire that came into effect on October 10, Israeli forces have withdrawn to positions behind a so-called "Yellow Line" in Gaza, though they remain in control of more than half of the territory.

"Following the identification, the (Israeli air force) struck and eliminated the terrorists in order to remove the threat," the military said.

A military press officer told AFP that its troops had "killed two terrorists and not children", without specifying the ages of those killed.

The civil defense said another fatality was also reported in a separate incident when an Israeli quadcopter struck a group of civilians in Jabalia, also in northern Gaza.

It did not provide details on the person killed in that incident.

The press officer said the military had reports of only one incident.

Israeli forces have killed at least 477 Palestinians in Gaza since the ceasefire took effect, according to Gaza's health ministry, which operates under Hamas authority.

The Israeli army says Palestinian militants have killed four of its soldiers during the same period.

Media restrictions in Gaza and limited access to many areas mean AFP cannot independently verify casualty figures and details provided by either side.

The ceasefire has largely halted fighting between Israel and Hamas, but both sides have accused each other of violating its terms.