Axios: a difficult and frustrating 45 minutes phone call between Biden and Netanyahu

According to Axios website who quoted US and Israeli officials as saying that US President Joe Biden had a difficult conversation last weekend with Israeli Prime Minister Benjamin Netanyahu regarding Israel’s decision to withhold part of the tax revenues it collects for the Palestinian Authority.

The tax revenues that Israel collects for the Palestinian Authority under an agreement between the two sides constitute a major source of income for the Palestinian Authority, which is already suffering from a financial crisis.

The far-right Israeli Finance Minister, Bezalel Smotrich, had decided last October to suspend the transfer of all tax revenue funds after the Hamas attack, but the Israeli government said it would transfer all funds except those that it says go to Hamas-run Gaza.

However, the Palestinian Authority refused accepting a partial transfer of funds, raising concerns in the Biden administration about a possible economic collapse of the Palestinian Authority.

Axios website pointed out that the issue has become a thorn in the side of Israeli Prime minister Benjamin Netanyahu, who is facing pressure from the Biden administration to release the funds, and Smotrich, who expressed his opposition to the release of any of the funds, even indirectly, and threatened to resign over this issue, which may expose the Prime Minister’s coalition government to danger.

In recent weeks, the Biden administration has pressured the Israeli government to release Palestinian tax revenues it’s withholding.

The US administration expressed its fears that the economic collapse of the Palestinian Authority would lead to a violent escalation in the occupied West Bank as a result of its inability to pay the salaries of its security forces.

Israeli and US officials said that the 45-minute call between Biden and Netanyahu last Saturday focused on the next phase of the Israeli ground operation, but at the end of the call, Biden raised his concerns about withheld Palestinian tax revenues.

According to the officials, Biden asked Netanyahu to accept the proposal put forward by the Israeli Prime Minister himself several weeks ago, which is to transfer withheld tax revenues to Norway for safekeeping until an arrangement is reached that would allay Israel’s fears that the money would reach Hamas.

The Palestinian Authority has already accepted this proposal and informed the United States that under this agreement it will resume taking part of the tax revenues that weren’t withheld, according to a US official.

In the phone call, Netanyahu has backed down and said he didn’t think this was a good idea anymore, as he told Biden that he doesn’t trust the Norwegians, adding that the Palestinian Authority should only accept a partial transfer of funds.

Axios sources indicated that Biden responded and said that the United States trusts Norway’s proposal and this should be enough for Israel to trust it as well.

According to US and Israeli officials, Biden told Netanyahu that he must confront hardliners in his coalition on the issue just as he is dealing with political pressure from Congress over the war in Gaza.

After a few minutes of discussion, Biden told Netanyahu that he expected him to resolve the issue, added that this conversation is over, and ended the call, according to a US official.

The US official told Axios that there was a feeling that the president was doing his best for Netanyahu every day, and when Netanyahu needed to return the favor and take some political risks, he didn’t want to do so.

The second US official, asked to comment on this issue, downplayed this argument and said that Netanyahu didn’t reject Norway’s idea, but “just said that they are still working things out on their side”.

A few days after the Biden-Netanyahu call, the issue came up again during the meeting held by Israeli Minister Ron Dermer at the White House with US National Security Advisor Jake Sullivan.

According to the US official, “We’ve made good progress and believe that the issue of transferring tax revenues is on its way to the solution”.