Yellen Urges Israel to Restore Economic Ties to West Bank

Since Hamas’s brutal Oct. 7 attack on Israel, the Israeli government has been withholding tax revenues that it collects on behalf of Palestinians. Traditionally, that money has been distributed back to the Palestinian Authority, which used it to fund its operating budget. Israel has previously frozen and then released that tax revenue during periods of conflict with the Palestinians.

The White House national security communications adviser, John Kirby, said last month that President Biden had discussed with Mr. Netanyahu the need to ensure that the tax revenues were available to pay salaries for Palestinian security forces in the West Bank.

Ms. Yellen said on Tuesday that she was encouraged that revenue was starting to make its way to the West Bank. That money has started to flow following an agreement between Israeli and Palestinian officials earlier this month to use Norway as a temporary intermediary to transfer the tax funds that Israel had frozen.

“The United States has urged the Israeli government to release clearance revenue to the Palestinian Authority to fund basic services and to bolster the economy in the West Bank,” Ms. Yellen said. “I welcome news that an agreement has been reached and funds have started to flow. This must continue.”

The Treasury secretary said that the war in Gaza had not yet had a significant impact on the global economy. She also addressed another conflict, Russia’s war in Ukraine, that has disrupted food and energy markets over the last two years and called on Western allies to provide more aid to Ukraine.