Israel has withheld 590 million shekels, approximately $198 million, in taxes and customs duties collected on behalf of the Palestinian Authority (PA), exacerbating the economic crisis faced by the Palestinian working class. This act of economic warfare comes as Israeli military forces continue strikes in Lebanon and settlers escalate attacks against Palestinian homes in the West Bank.
Israeli Finance Minister Bezalel Smotrich directed the diversion of these funds, which constitute 590 million shekels out of the 740 million shekels, or about $248 million, slated for transfer to the PA this month. The ministry statement claimed the funds were diverted to cover the authority's alleged debts to electric, water, and environmental corporations, and also asserted that some funds were earmarked by the PA for "terror groups."
Smotrich articulated the state's policy of economic control, stating, "We will not transfer funds that ultimately reach terrorists who harm Israeli citizens. Our policy is clear: every shekel intended to encourage terrorism or hostile activity will be deducted and stopped." Israel has intermittently withheld funds from the PA since 2019, with restrictions tightening significantly since Smotrich began his tenure as finance minister and further intensified since October 7, 2023.
Palestinian Finance and Planning Minister Estephan Salameh warned in February that the PA would face extreme fiscal difficulties throughout 2026. Salameh described the situation as the most severe economic crisis since the authority's establishment, directly attributing it to the Israeli authorities' continued refusal to transfer tax revenues and customs duties collected on their behalf. This economic strangulation directly impacts the ability of the PA to provide essential services to the Palestinian population, deepening the immiseration of the dispossessed.
The State's Hand in Violence and Extraction
Simultaneously, Israeli settlers attacked a home on the outskirts of the central West Bank village of Jalud on Monday, near the illegal outposts of Esh Kodesh and Ahiya. Reports and footage from the scene indicated casualties, demonstrating the direct physical violence inflicted upon Palestinians by those acting to expand and secure settler-colonial holdings.
Earlier the same day, settlers broke through a wall of the home and attempted to enter it. On Saturday, settlers had also tried to break into the residence, assaulting and wounding a Palestinian man. Several weeks prior, settlers, some armed with rifles, entered the property freely and set fire to the entrance of the home, illustrating a pattern of escalating aggression aimed at dispossessing Palestinians from their land.
Across the border, the Israeli military began carrying out strikes in Lebanon's east on Monday, targeting what it described as Hezbollah infrastructure in Lebanon's eastern Beqaa Valley and areas in southern Lebanon. Security sources confirmed strikes hit near the town of Nabi Chit, close to Lebanon's eastern border with Syria, with additional airstrikes reported in the Al-Shaara area in the eastern Beqaa Valley and in the village of Toulin in southern Lebanon, as well as the Tyre region.
Hezbollah, representing a segment of organized resistance, responded to these incursions. A senior Hezbollah military official stated in an interview with Al Jazeera that the group intends to "use 1980s-era tactics" and deploy squads of "suicide fighters" to prevent Israel's entrenchment in the area. He further elaborated that "large groups of suicide fighters are deployed in the occupied area according to pre-prepared plans," with a mission to "confront officers and soldiers of the enemy in the occupied Lebanese villages." This signals a commitment to direct confrontation against the imperial garrison.
Managing Contradictions, Perpetuating Conflict
Lebanon's president offered a liberal solution, stating, "what we are doing is not betrayal, but the real betrayal is by those who lead their country to war for external interests." He expressed a goal to end the state of war with Israel, similar to a cease-fire agreement, emphasizing that any deal should include an Israeli commitment not to carry out military strikes against targets in Lebanon. This reformist proposal seeks to manage the conflict's symptoms without addressing the underlying structural causes of Israeli expansion and military projection.
However, the inadequacy of such proposals was immediately evident as Israel continued to strike Lebanon, including the aforementioned airstrikes in the Al-Shaara area and Toulin, and an additional strike in the Tyre region reported by Lebanon's National News Agency. The Israeli military also reported that forces operating in the Israeli buffer zone in Lebanon were targeted by an "explosive drone" launched by Hezbollah, with no injuries reported. In a separate incident, an Israeli soldier and three reservists entered southern Lebanon's Bint Jbeil for non-operational purposes, an entry facilitated by the commander of the Givati Brigade without authorization, indicating internal operational complexities within the occupying forces. The military also claimed its forces killed armed militants in the buffer zone, stating Golani Brigade troops engaged in "close-quarters combat" before a drone struck and killed them, further illustrating the ongoing enforcement of state power through military means.