JERUSALEM: Israel is withholding $127 million in tax revenue it collects for the Palestinian Authority in response to its move last week to join the International Criminal Court, further escalating tensions with a step that could have serious repercussions for both sides.

Saeb Erekat, the chief Palestinian negotiator, said Saturday that the Israeli move could lead to the disintegration of the 20-year-old authority because it would be unable to pay government workers or provide public services. He vowed to retaliate by expediting the petitions to join the court and other international agencies and said Israel “will be held accountable for everything.”

“He will be solely responsible for the Palestinians under occupation in the West Bank, Gaza and East Jerusalem,” Mr. Erekat said of Prime Minister Benjamin Netanyahu of Israel.

“It’s our tax money. It’s our people’s money,” Mr. Erekat said, accusing Israel of “destroying” the Palestinian Authority.

Mr. Netanyahu’s office declined to comment on the decision to withhold the monthly transfer, which was made at a ministerial meeting on Thursday and confirmed by Israeli and Palestinian officials who requested anonymity to discuss the sensitive issue.

Mr. Erekat said the tax revenue provided the bulk of the authority’s $160 million monthly operating budget. It is the first of an expected series of punitive measures in a response to a push by the Palestinians to prosecute Israeli officials on war crime charges over the battle with militants in the Gaza Strip last summer and for continuing settlement construction in the West Bank and East Jerusalem.

“It’s not the last step,” Gilad Erdan, a minister from Mr. Netanyahu’s Likud Party, said on Israeli television Saturday night. “Other steps are being considered.” Mr. Erdan acknowledged that freezing the tax transfer “is not the solution” to the conflict but said that because the Palestinians are “taking unilateral steps” like joining the court, “Our task is to protect ourselves, our state, and Israel Defense Forces officers and soldiers. And we have a great many ways of doing so.”

Israel has withheld taxes at least a half dozen times before, including in April after the Palestinians joined 15 international treaties and conventions as American-brokered peace talks were collapsing, and in 2012 after the United Nations General Assembly upgraded their status to that of a nonmember observer state. The transfers were usually renewed within weeks, serving as a symbolic slap without pushing the authority to financial abyss.

But the situation has deteriorated significantly over the last year, with the abductions and murders of Israeli and Palestinian teenagers, followed by the 50-day war that killed nearly 2,200 people in Gaza and more than 70 on the Israeli side, and a spate of deadly terror attacks and clashes in the fall. Frustrated after decades of failed bilateral negotiations, the Palestinians have adopted a global strategy, successfully lobbying European parliaments to recognize them as a state, joining more than 30 international conventions, and pressing for a United Nations Security Council resolution setting a 2017 deadline for ending Israel’s occupation.

The Security Council resolution failed last week, but the Palestinians plan to represent it this month, after the council’s membership has shifted in their favor. Joining the International Criminal Court was long considered to be the Palestinians’ doomsday weapon. Now they have used it, they have fewer — but potentially more potent — weapons in their arsenal, chiefly collapsing the authority and suspending security coordination with Israel.

Either would have profound implications for the Palestinians and Israel. Without the help of Palestinian security forces, Israel would struggle to curb violence. Taking responsibility for education, health and other services for 2.5 million Palestinians in the West Bank and 1.8 million in Gaza would be a huge budgetary blow. It would also make the nearly half-century occupation more stark on the international stage.

Giora Eiland, a former Israeli national security officer, called withholding taxes “counterproductive.” “If you cut the payments to the Palestinian Authority, then who is not going to be paid? Some of them are the Palestinian policemen. Do we want them to be frustrated, or do we want them to continue to cooperate with us?” Mr. Eiland said.

Source: NYT