Harriet Sherwood

September 19, 2011

US and European negotiators have urged Israel to refrain from taking punitive measures against the Palestinians if they press ahead with their bid to win recognition of a home state at the United Nations.

The Israeli government is considering a range of retaliatory steps, including withholding customs revenues it collects on behalf of the Palestinian Authority under the terms of the Oslo accords. The amount, around 400m shekels (£69m), is forwarded to the PA each month.

Some Israeli ministers, including the extreme rightwing foreign minister, Avigdor Lieberman, and the finance minister, Yuval Steinitz, are calling for the money to be withheld. But US and EU diplomats fear this could seriously destabilise the PA and even possibly cause its collapse.

Dan Meridor, the deputy prime minister, who is believed to oppose such a move, said on Monday that no decisions had been taken by the Israeli cabinet. “I try not to use the language of threats,” he told a conference in Jerusalem.

Co-operation between the PA and Israel on security and economic issues “has been helpful to both sides”, he added. Any decisions, he said, would “need to take into account Israeli interests”. If the PA collapsed, Israel would be forced to take responsibility for the Palestinian territories, which it is reluctant to do.

Nabil Shaath, a senior member of the Palestinian team in New York, said at the weekend that the PA was not unduly concerned about Israeli threats to withhold customs revenues.

The US Congress has also threatened to halt American funding of the PA if the UN move goes ahead. “You don’t barter your rights for money,” said Shaath. He said Arab states had given the PA assurances that they would make up any shortfall, and the Europeans and Japanese had also pledged not to cut funds.

Other punitive measures proposed by Israeli ministers include annexing the West Bank settlements to Israel and tearing up the Oslo accords, under which the PA was given control of parts of the West Bank and Gaza.

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