Israel will free $100 million in withheld Palestinian tax revenues today in the hope of boosting the moderate Palestinian President Mahmoud Abbas with funds that could pay long-overdue salaries in the Palestinian public sector, which has been hit hard by a Western and Israeli embargo of the Hamas-led government.
The move comes two days before Mr Abbas heads to Syria for talks with the top Hamas leader to forge a unity government aimed at ending a punishing international aid boycott. The talks have stuttered for months amid deadly clashes between forces loyal to the two sides, but the fact that Mr Abbas was meeting Khaled Mashaal of Hamas was a sign that an agreement was finally at hand.
The money is part of the tax money Israel collects for the Palestinian Authority under partial peace accords, including customs and value added tax. Israel halted transfer of the funds when Hamas won control of the Palestinian parliament and set up its cabinet in March 2006.
Israel says it cannot feed money to a Hamas-led government, labelling Hamas a terror group because of its history of dozens of suicide bombings against Israelis over the past decade. The US and EU joined in the boycott, halting the foreign aid that has kept the Palestinian Authority afloat since it was created in 1994. The funding freeze has caused widespread hardships in the West Bank and Gaza.
An Israeli official said the money would be transferred directly to Mr Abbas for use in humanitarian efforts and to boost his own security force, the Presidential Guard. The official, speaking on condition of anonymity because the decision had not been made public, said Israel was satisfied by assurances that the money would not go to the Palestinian Finance Ministry, which is controlled by Hamas.
Palestinian negotiator Saeb Erekat, who is close to Mr Abbas, welcomed the Israeli move but noted the money belongs to the Palestinians in the first place. "We hope the Israelis will release all the withheld funds," he said. "This is about 25 per cent of the total they owe us."
Acting finance minister Samir Abu Aishah of Hamas said the government should decide how the money is spent.
"This is supposed to be spent according to Palestinian priorities. It is not for Israel to determine where it goes," he said.
Israel has been trying to boost Mr Abbas in his struggle with Hamas, which rejects the existence of a Jewish state in an Islamic Middle East. However, such efforts can backfire, as Palestinians of all stripes try to distance themselves from the Israelis.
Mr Abbas will visit Damascus on Saturday, where he was to meet Mr Mashaal for the first time in years. Mr Abbas's Fatah and Hamas are bitter enemies - their efforts to form a unity government must overcome deep ideological and political divides.