Israel will transfer millions of dollars to Palestinians, but threatens la

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JERUSALEM (AP) - Israel agreed to make a crucial payment of $54 million in tax and customs revenues to the Palestinians, but officials said future transfers will be halted once Hamas militants form the next Palestinian government.

The decision was taken shortly after a flare-up of violence. Israeli forces pounded the northern Gaza Strip with missiles and artillery fire, killing three Palestinian militants. Hours later, a Palestinian assailant killed one woman and wounded four other people in what police called a politically motivated stabbing in central Israel.

Israel collects millions of dollars in taxes and customs duties for the Palestinians, transferring the funds to the Palestinian Authority each month. Israel delayed the most recent payment last week to protest Hamas' victory in Palestinian legislative elections, deepening a financial crisis for the cash-strapped Palestinian Authority.

Israeli Cabinet minister Zeev Boim said before Sunday's government vote that the money was being transferred because Hamas is not part of the Palestinian government yet.

Santa Barbara News Press

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1. Israel to Transfer $54M to Palestinians

I'm guessing that it dawned on somebody that if you keep the money, you lose whatever negotiating leverage that it might have given.

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Israeli Cabinet minister Zeev Boim said before Sunday's government vote that the money was being transferred because Hamas is not part of the Palestinian government yet.

The Cabinet said it would review the payments each month. Boim said the funds would be cut off if Hamas, which has killed hundreds of Israelis in suicide bombings, does not change its ways.

"If and when Hamas rises to power and supports policies according to its jihad principles of destroying Israel, not another dollar will be transferred," he told Israel Radio.

The United States and Europe have threatened to cut off tens of millions of dollars in Western aid to the Palestinians if Hamas does not renounce violence, disarm and end its calls for Israel's destruction. The United States and European Union list Hamas as a terrorist group, making it difficult, if not illegal, for them to give money to a government led by Hamas.

ABC News