Israel

On Sunday, the Israel Cabinet voted to immediately freeze the transfer of sales tax receipts that Israel collects on behalf of the Palestinian Authority. The sales receipts, which total around $50 million a month, represent approximately one-third of the Palestinian Authority's operating budget and threatens to consign the new government to a financial crisis. Hamas is now turning to its likely ally, Iran, for funds, according to the Jerusalem Post

So far the members of the so-called Middle East Quartet -- the United States, the European Union, Russia, and the United Nations -- have not suspended their aid to the Palestinian authority, though all four entities state that the aid is "under review" and will wait until the Hamas-led government takes form before deciding on whether to continue the aid.

It appears that Israel's decision to withhold the tax receipts now instead of waiting three or four weeks until the Hamas government is formed has been partly motivated by Acting Prime Minister Ehud Olmert's effort to capture additional votes from more conservative elements in the Israeli electorate before next month's elections.

In the end, though, this move should be a formality since I expect the Quartet to withhold their aid once the Hams government is formed. Hamas, of course, does not intend to recognize Israel, nor do they intend to recognize past treaties signed by the P.A. and Israel. The lack of aid will hurt the Palestinian people but the alternative would be for Israel and the Quartet to directly fund a terrorist organization, leading to the bizarre probability that Israel or the U.S. would be financing suicide bombings.

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