Biden administration seeks financial support for Palestinian authority amid looming crisis: Report

By Seda Sevencan

ISTANBUL (AA) - The Biden administration is actively seeking measures to bolster the financial stability of the Palestinian Authority amid mounting concerns over an imminent funding crisis, according to a Wall Street Journal report, citing US officials.

Officials in Ramallah have issued warnings that the Palestinian Authority is teetering on the brink of insolvency, potentially jeopardizing US aspirations for the organization to effectively govern Gaza following Israel's war on the Gaza Strip.

To circumvent legal restrictions barring direct contributions to the Palestinian Authority, the US is exploring alternative avenues while also urging allies to boost their financial support, US officials said.

Palestinian officials have sounded alarms that they may exhaust the funds necessary to meet payroll obligations and sustain essential government services as early as late February, US officials revealed.

The US has pinned its post-war hopes on a revitalized Palestinian Authority as the linchpin for stability in the region. However, US officials said without a revenue boost, the organization's ability to maintain control in the West Bank and expand its role could be severely compromised.

The Palestinian Authority has relied on assistance from the US and Europe, in addition to tax revenues collected by Israel. However, cuts in aid under the Trump administration put the Ramallah, West Bank-based organization under financial strain, and also a suspension of Israeli tax revenue following Oct. 7 has left it “on the verge of financial collapse,” a senior Palestinian official told The Wall Street Journal.

The ramifications of a funding shortfall could extend beyond financial instability, US officials warned, to the point of leaving it “vulnerable to groups viewed by the U.S. and Israel as more extremist and opposed to compromise. It could also be overwhelmed by a deteriorating security situation in the West Bank, the officials say, amid an increase in clashes between Israeli forces and Palestinian militants, as well as attacks by Israeli extremists.”

The financial crisis has been brewing since 2020, the senior Palestinian official said. He voiced hope that international pressure would expedite the transfer of much-needed funds to avert a catastrophe.