Israel warns Palestinian Authority on brink of economic collapse Urgent funds needed

Senior officials from Israel’s internal security service, Shin Bet, have warned the government that the Palestinian Authority (PA) is facing severe financial distress and could be on the verge of an economic collapse.

Prime Minister Benjamin Netanyahu held a closed-door meeting on September 4 to discuss potential responses to unilateral actions by the PA on the international stage, Caliber.Az reports, citing Israeli media.

Shin Bet representatives briefed him on the deteriorating situation within the PA.

Officials highlighted early signs of institutional and economic collapse in the Palestinian territories. “The economic situation is dire. Unemployment is rising, and many public sector employees are either not being paid or receiving only a fraction of their salaries. All of this could lead to chaos and further escalation,” they warned.

To prevent the PA from collapsing, Israel would need to take measures to avert a financial crisis. This includes transferring funds that the Cabinet had previously decided to withhold from the PA budget.

However, Finance Minister Bezalel Smotrich is reportedly opposed to such payments. He and other government members have instead pushed for the annexation of the West Bank.

Smotrich has withheld roughly one billion shekels (nearly $300,000) from the PA, and in response to European pressure — which has also involved halting funding for the PA — he has opted to approve increased humanitarian aid to Gaza rather than releasing the funds to the Palestinian Authority.

By Aghakazim Guliyev