In a recent development, Israel has decided to withhold taxes collected for the Palestinian Authority (PA) and instead hold them in Norway, a decision that has sparked controversy and further strained relations between the two entities. The move, approved by Israeli officials, aims to exert control over the tax revenues and has raised concerns about potential repercussions for the PA and its ability to function effectively.

Under the terms of a 1990s agreement, Israel collects taxes on behalf of the Palestinians and transfers the funds to the PA, subject to approval from the Ministry of Finance. However, the frozen funds will now be retained by a third country, with the requirement of Israeli Minister of Finance's approval for any potential transfer.

The decision has been met with strong opposition from the PA, which has refused to accept a partial transfer of the money. Senior PA official Hussein al-Sheikh expressed dismay over the deductions and conditions imposed by Israel, considering them a violation of their financial rights. He called on the international community to intervene and compel Israel to transfer the complete amount.

Political analysts, such as Nour Odeh based in Ramallah, believe that Israel's withholding of tax revenues is a deliberate attempt to weaken and punish the PA. Withholding funds allocated for Gaza could have significant impacts on the livelihoods of public sector employees who rely on these salaries. Odeh highlighted the urgent need for these funds to alleviate the humanitarian crisis caused by Israel's blockade and recent conflicts.

However, not everyone in the Israeli government supported the decision. Itamar Ben-Gvir, a far-right National Security Minister, opposed sending the funds to Norway, expressing concerns that the money could still find its way to Gaza. Ben-Gvir criticized Prime Minister Benjamin Netanyahu for continually shifting the boundaries.

The freezing of Gaza tax funds has also caused division within Israel's war cabinet, with Defense Minister Yoav Gallant advocating for the funds to be distributed to maintain stability in the occupied West Bank.

As tensions rise due to these latest developments, attention now turns to how the PA will respond and whether international pressure will play a role in resolving this dispute. The economic and humanitarian consequences for Gaza, already reeling from the effects of ongoing conflicts, will undoubtedly be significant if the frozen funds are not released.