Israel to give Palestinians $100 million in withheld funds

Reuters ^ | Wed Jan 30, 2013 1:51pm GMT | Dan Williams

[Pan_Yan]

(Reuters) - Israel will give Palestinian President Mahmoud Abbas's administration around $100 million (63 million pounds) in tax revenues that had been withheld in retaliation for his statehood bid in the United Nations, Israeli officials said on Wednesday.

The sum is roughly a third of the funds Israel is meant to have transferred to the Palestinian Authority (PA) since November under interim peace accords, but has instead kept.

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PA tax authority official Ahmed al-Helou told Reuters that Israel spent the October levies to help pay off $200 million it says the Palestinians owe the Israel Electric Corporation.

Israel said last month it would withhold revenues from the PA until March at least.

The PA's economic troubles were raised this week in a meeting between Netanyahu and Tony Blair, peace envoy for the United States, United Nations, European Union and Russia, an Israeli official said.

Following those talks, the official told Reuters on condition of anonymity, "we have agreed to transfer one month's payment, because of the difficult financial situation there."