Norway will transfer funds to the Palestinian Authority after a monthslong standoff with Israel

COPENHAGEN, Denmark (AP) — Norway says it will transfer tax funds to the Palestinian Authority that have been frozen for months because of a dispute with Israel.

Under interim peace agreements dating back to the early 1990s, Israel collects taxes and customs on behalf of the PA, which administers parts of the occupied West Bank and also helps pay for public services in Gaza.

After Hamas’ Oct. 7 attack triggered the war in Gaza, Israel reduced the transfers by the amount that is spent on the territory. The PA refused to accept the partial transfers, even though it relies on the taxes to cover most of its budget.

Under the agreement announced on Sunday, Israel will transfer all the funds to Norway. The Scandinavian country will in turn transfer funds for the West Bank to the Palestinian Authority while holding those destined for Gaza.

"The temporary scheme will play a crucial role in preventing the Palestinian Authority from collapsing financially,” it said in a statement Sunday. The transfer will allow the PA to pay salaries to teachers, health workers and other public employees.

“Ensuring that the Palestinian Authority does not collapse and can provide essential services to the population is vital to safeguarding the very existence of the Authority, promoting a political process and realizing a future two-state solution,” Norwegian Foreign Minister Espen Barth Eide said.

There was no immediate comment from Israel or the Palestinian Authority.

Israel has reduced the tax transfers in the past to protest the PA’s payments to families of Palestinians imprisoned by Israel and those slain in the conflict, including militants who killed Israeli civilians.

Israel says such payments reward and incentivize violence, while the Palestinians view them as a source of social welfare for people harmed by the conflict.

The United States, Israel's top ally, is pushing for a postwar settlement in which a revitalized Palestinian Authority would govern the West Bank and Gaza ahead of eventual statehood. Netanyahu has rejected that idea, saying Israel must maintain open-ended security control over both territories.

Hamas seized power in Gaza in 2007 after a prolonged political crisis, driving forces loyal to the PA out in a week of street battles and confining the PA's authority to parts of the occupied West Bank.

Norway played a key role in brokering the 1993 Oslo Accords that launched the Israeli-Palestinian peace process. But no serious or substantive peace talks have been held since Netanyahu returned to office in 2009, and his government is opposed to the creation of a Palestinian state.

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