Israel announces financial punishment for Palestinians

Benjamin Netanyahu was not bowed after UN Palestinian statehood vote

ISRAEL -(AP) Israel on Sunday roundly rejected the United Nations’ endorsement of an independent state of Palestine, and announced it would withhold more than $100 million owed to the Palestinians in retaliation for their successful statehood bid.

It was the second act of reprisal since the U.N. General Assembly voted overwhelmingly on Thursday to support the Palestinians’ statehood initiative. Less than 24 hours later, Israel announced it would start drawing up plans to build thousands of settlement homes, including the first-ever residential developments on an ultra-sensitive piece of real estate near Jerusalem.

Prime Minister Benjamin Netanyahu declared the statehood campaign, led by Palestinian President Mahmoud Abbas, as “a gross violation of the agreements signed with the State of Israel.”

“Accordingly, the government of Israel rejects the U.N General Assembly decision,” he said. Israel, backed by the U.S., campaigned against the statehood measure, arguing that only negotiations can deliver a Palestinian state.

The U.N. resolution spelled out the borders of a future Palestine, endorsing the Palestinian position that it comprise the West Bank, east Jerusalem and Gaza Strip, territories captured by Israel in the 1967 Mideast war. Israel rejects a full pullback to its 1967 lines, and says the resolution is a way to bypass border negotiations.


In Sunday’s response, Finance Minister Yuval Steinitz said the government would also strike at the Palestinians’ pocketbook, by withholding taxes and customs collected from Palestinian laborers and businesses on behalf of Abbas’ cash-strapped Palestinian Authority, which led the statehood campaign.


The money will be used to help pay off the authority’s debts to Israel, including $200 million owed to the state-run Israel Electric Corp., government officials said. This month, more than $100 million was to have been transferred; Steinitz said Israel would decide later whether to withhold future transfers as well.


The General Assembly decision late Thursday to accept “Palestine” as a non-member observer state in the West Bank, east Jerusalem and Gaza didn’t grant actual independence to the 4.3 million Palestinians living in those areas.


By sidestepping two decades of troubled negotiations – include the latest four-year impasse – and going straight to the U.N., Palestinians hope to redouble global pressure on Israel to negotiate the borders of a future Palestine.


Netanyahu sounded anything but bowed on Sunday.


“Today we are building and we will continue to build in Jerusalem and in all areas that appear on Israel’s map of strategic interests,” he told his Cabinet.


Half a million settlers currently live in the West Bank and east Jerusalem, the result of a decades-long strategy aimed at blurring the borders between Israel and the occupied territories.


The U.N.’s endorsement of the Palestinians’ vision of their future state was a resounding condemnation of Israel’s settlement policies. Israel’s failure to rally any major European powers, including its closest allies, to its cause came as a stinging diplomatic blow.


Israel took little time to respond. Israel announced Friday that it would press ahead plans to build 3,000 housing units in the West Bank and east Jerusalem, the core of the Palestinians’ hoped-for state.


More worrisome for the Palestinians, it vowed to dust off a master plan to build 3,600 apartments and 10 hotels on the section