The Israeli Public Broadcasting Authority (Kan Radio) announced that the Israeli army has warned the government that its policy of cutting funding to the Palestinian Authority might push the occupied West Bank toward a "third intifada." This warning comes as the war in Gaza enters its ninth month, highlighting the increasingly deteriorating economic situation in the West Bank, where hundreds of thousands of workers have lost their jobs in Israel, and public sector employees have not received wages, at least partially, for months.
The West Bank, home to 2.8 million Palestinians and 670,000 Israeli settlers, is under Israeli occupation, with the Palestinian Authority exercising limited self-governance. Israel has barred Palestinian workers from entering from the West Bank since the attack on October 7, which accelerated the war in Gaza. According to statements from the Palestinian Ministry of Finance, Israel retains around six billion shekels (1.61 billion dollars) in total from tax revenues collected on behalf of the Palestinian Authority, exacerbating the significant financial pressure that leads to increasing hardships as donor funds dwindle.
Nasser Abdul Karim, an economics expert and lecturer at Al-Ahliyya University in Ramallah, stated that the Palestinian Authority has compensated for some of the shortfall by obtaining private loans, but this is unlikely to be sustainable in the long run. He added, "This month, the Authority had the option to pay half a salary by taking a loan from banks or a fund, as media reports suggested. Will this option be available next month or the one after?"
Even before the war in Gaza, rising violence raised fears of a third uprising akin to the previous two uprisings in the 1980s and the early 2000s. The Israeli broadcasting agency reported, based on a military memorandum, that tensions arising from financial constraints threaten to transform the West Bank from a secondary theater in the war into a primary battleground. The military is increasingly concerned as economic hardships have fueled violence, resulting in the deaths of hundreds of Palestinian civilians.
Violent incursions by groups of Israeli settlers into Palestinian villages have become common, and more than 12 Israelis have been killed in attacks by Palestinians in the West Bank and East Jerusalem. A spokesperson for the Israeli Ministry of Defense stated she was unaware of the document. However, an Israeli official, who requested anonymity, confirmed the memorandum's existence, stating that it was circulated among several government ministries, the army, and security agencies "more than a week ago."
The Palestinian Authority has been engaged in a bitter confrontation for months with Bezalel Smotrich, the far-right Israeli finance minister, who refuses to disburse tax revenues. Badi' al-Dweik, an employee at the Ministry of Labor, noted that civil servants were receiving no more than 70 to 80% of their salaries before October 7. Dweik added, "After October 7, they gave us 50%, and it's difficult to cope with this salary; the situation is very miserable; there are employees with many debts."
Kan Radio emphasized that the memorandum prepared by officials from the army and Shin Bet indicated that income reduction is likely to push many Palestinians toward armed groups financially supported by Iran. The memo recommended a series of measures, including opening more crossing points between Israel and the West Bank to allow Palestinians in Israel to shop more easily and testing entry, under Israeli supervision, for a limited number of Palestinian workers.
Mohammad Abu Rab, the spokesperson for the Palestinian government, stated that the tax revenues withheld by Israel equal 70% of the general budget revenues and described it as part of a general campaign against Palestinians in the West Bank and Gaza Strip. He added, "There is a severe financial blockade imposed by Israel on the Palestinian people and the Palestinian leadership, just as in the case of the war in Gaza."
