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Israel restores tax transfers to Palestinians

| Monday, March 25, 2013, 8:57 p.m.

JERUSALEM — Israeli Prime Minister Benjamin Netanyahu has authorized a resumption of the monthly transfer of taxes and customs duties collected by Israel for the Palestinian Authority, his spokesman said on Monday, providing badly needed relief for the cash-strapped Palestinian government in the West Bank.

The move, made days after a visit by President Obama, reverses an Israeli decision to suspend the regular tax transfers as punishment for the successful Palestinian bid in November to become a nonmember observer state at the United Nations.

During his visit, Obama urged a resumption of Israeli-Palestinian peace talks, and Israeli media said he and Secretary of State John Kerry, who held follow-up meetings with Netanyahu and Palestinian Authority President Mahmoud Abbas, pressed for confidence-building measures to help restart negotiations.

Mark Regev, a spokesman for Netanyahu, said at the end of Obama's visit that Israel was prepared to carry out confidence-building steps, provided they were also taken by the Palestinians.

The taxes and customs duties handed over by Israel, about $100 million a month, amount to two-thirds of the Palestinian Authority's domestic revenue. The authority has been struggling to pay salaries of about 150,000 employees because of disruptions in the Israeli transfers and a falloff of funds from foreign donors, particularly from Arab states.

Israel twice released Palestinian tax funds collected in December and January to avert a deepening of the fiscal crisis, but the overall suspension of the regular transfers remained in force until Netanyahu's decision was announced.

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