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The Palestinian Authority: History & Overview

The al-Aqsa Intifada and Aftermath
Abbas Takes Control
Developments From 2014-2018
Payments to Prisoners and Martyrs
The PA Rejects West Bank Division
Arab States Cut Aid
Abbas Turns to China
Abbas Fires Governors
A Return to Gaza?
Abbas Appoints New Government

A Renewed bid for Palestinian Statehood at the UN


The Palestinian Authority (also called the Palestinian National Authority) is the semi-official, self-governing Palestinian body established in May 1994 in accordance with the Israel-PLO Declaration of Principles on behalf of the Palestine Liberation Organization (PLO).

On its establishment, the PA governed most of the Gaza Strip and the town of Jericho in the Jordan Valley, representing the first step in the implementation of the interim arrangements for Israeli withdrawal (“redeployment”) from territories in the West Bank and Gaza Strip. This process was to culminate in “permanent status talks” to begin in May 1996 on all major issues in dispute between the two parties (settlements, Jerusalem, Palestinian refugees, and the final status of the PA and its territory). The DOP agreement stipulated that the transfer of responsibilities to the PA would be completed within five years and would include education and culture, health, social welfare, direct taxation, and tourism. It was also agreed that a Palestinian police force would be established to maintain internal security and prevent hostile acts of terror against Israel by the Palestinian population under its authority. Israel would retain overall authority for security and defense regarding all external threats, and particularly the safety of the Israeli settlers.

The Israel-PLO negotiations that led to the establishment of the PA became possible following King Hussein’s proclamation on July 31, 1988, formally relinquishing Jordan’s legal and administrative control over the Palestinian territories. After this act, the Palestinian National Council (PNC) unilaterally declared, at its November 1988 meeting in Algiers, the establishment of an independent Palestinian state based on the UN partition resolution of November 1947.

On May 17, 1994, Israel and the PLO signed the Cairo Agreement. This elaborated the transfer of authority to the Palestinians as well as the security arrangements between the two sides. Soon after, the PLO officially established the PA. It was the nucleus of a government apparatus that assumed control of the Gaza Strip (excluding the Israeli settlements) and Jericho. Before the end of June of that same year, Yasser Arafat arrived in Gaza to chair the PA.

The interim agreement (Oslo II), signed on September 28, 1995, set the timetable and modalities for the later stages of the process. Under this agreement, by late December 1995, the IDF had withdrawn from five major towns in the West Bank (out of the six stipulated in the deal) in preparation for elections to both the Palestinian Council and the office of PA chairman. Shimon Peres’s government postponed withdrawal from the city of Hebron as a consequence of terrorist attacks and growing Israeli public resentment of the Oslo process.

The interim agreement divided the West Bank into three jurisdictional zones:

  • Area A (18% of the West Bank territory), including the urban areas, under full Palestinian authority;
  • Area B (22% of the West Bank), including a large part of the rural area, is under Palestinian authority for all civil matters, including public order, and Israeli authority for security matters;
  • Area C (60%) of the West Bank, including the settlements, the IDF bases, the Jordan Valley, and the desert area – is under full IDF authority, except for personal law.

In February 1995, the Higher State Security Court was established in Gaza. One of its first decisions was the abolition of the Israeli legal system (military and civilian) that had existed since the capture of these territories in 1967. Instead, the previous legal system was applied – the Jordanian law in the West Bank and the British Mandatory law in the Gaza Strip. According to the interim agreement, both legal systems were to be valid in criminal and civil matters only. The agreement, however, left in force Israeli law in all three zones of the West Bank.

The PA held its first meeting on May 26, 1994, with 20 members of the temporary nominated forum (in the absence of its chairman, Yasser Arafat). The lion’s share of the PA’s bureaucracy initially came from PLO headquarters in Tunis, though it was later complemented and probably outweighed by active local members of Fatah, the largest of the PLO factions, many of whom had spent varying periods in Israeli prisons or in exile.

The PA’s new bureaucracy doubled the already existing apparatus of teachers and officials (about 20,000) whom the Israeli civil administration had employed in the West Bank and Gaza. Furthermore, the PA created a huge body of various security and police forces, encompassing 25,000–30,000 men, mainly from previous Palestinian security apparatuses and military units. Within a short time, the PA became the largest employer in the territory under its control. Furthermore, Palestinian dependence on external financial aid channeled through the PA increased the latter's power, which would bolster its strategy of centralizing the economy.

Within less than two years, by building up official institutions of power, the PA managed to bring to bear policy-making capabilities and enforce order in a society that had never enjoyed self-government. This was mainly apparent in the emergence of numerous security organizations, all subordinated to Chairman Arafat but lacking coordination among them and fighting for power and financial allocations. In November 1994, the PA’s security apparatus clashed with Islamist rioters at the Filastin Mosque in Gaza, killing a number of them. The riots were the result of accusations made by the Islamic Jihad that the PA had provided Israeli security apparatuses with intelligence that enabled it to eliminate one of its leaders. Similarly, the PA had the upper hand in the clash with Jordan over the appointment to the prestigious position of mufti of Jerusalem. In October 1996, Arafat’s security apparatus acted to enforce the appointment of Sheikh Ikrameh Sabri to this position and replace the Jordan-appointed Sheikh Abdin.

In addition to establishing its radio and television authority, the PA also established its own print media organs. Apart from the independent daily al-Quds, published in Jerusalem since 1968, two other daily newspapers were launched by the PA or at its behest in Ramallah in the West Bank in 1995. PA Cabinet member Nabil Amr founded Al-Hayat al-Jadida (“The New Life”). The paper has been considered the PA’s official organ. The other daily, al-Ayyam (“The Days”), was started by Akram Haniyya.

In the summer of 1997, the PA opened a stock exchange in which only companies registered in the PA areas could be listed. In education, the PA inherited eight universities and 15 colleges. By the late 1990s, these institutes of higher education encompassed 71,000 students and 4,100 faculty members.


On January 20, 1996, the first elections to the Palestine Legislative Council (PLC) and PA presidency took place under international supervision. Many participated – approximately 88% of eligible voters in Gaza and 70% in the West Bank. Palestinian residents of East Jerusalem also participated in the elections, though in a much lower proportion. The Islamic Resistance Movement (Hamas) officially boycotted the elections. In practice, however, the movement encouraged its adherents to vote in favor of independent candidates – identified as Islamists – winning five seats in the PLC. As expected, the Fatah list – shaped and backed by Arafat – won 49 of the total 88 seats in the PLC (more than 55 percent). In addition, other independent Fatah candidates were elected, giving the movement 75% of the Council’s seats.

Political opposition to the PA remained in disarray, having a negligible impact, except for Hamas. The opposition, whose leaders and sources of political and financial support were based outside the Palestinian territory, had consisted of three main types and forms: (a) The Ten Front, a loose Syrian-based alignment of militant Palestinian groups, including: the Popular Front for the Liberation of Palestine (PFLP); the Democratic Front for the Liberation of Palestine (DFLP); in March 1999 it was expelled from the Front because of its leader’s repeated statements recognizing the State of Israel); the Palestine Liberation Front (PLF); Palestine Popular Struggle Front (PPSF); Popular Front for the Liberation of Palestine-General Command (PFLP-GC), Palestine Revolutionary Communist Party, Fatah al-Intifada (Fatah of the Uprising), al-Sa’iqa, Hamas; and the Islamic Jihad; (b) Individuals like Haidar Abdel Shafi (who resigned his membership in the PLC in 1996) and other Cabinet and Council members, most conspicuous of whom was Abdel Jawad Saleh, former mayor of al-Bireh and PLO Executive member; c) PLO mainstream figures living abroad, such as Faruq al-Qaddoumi, head of the PLO Political Department, who voiced his objections to the Oslo Agreement and its implementation by Arafat. Despite this opposition, Qaddoumi not only retained his position but maintained his working relationship with Arafat and was considered the strongest candidate to succeed him as PLO Chairman.

The PA’s performance came under growing Israeli public criticism as a result of continued terrorist attacks on Israelis both in the occupied territories and within the Green Line, carried out mainly by Hamas and the Islamic Jihad. The debate in Israel about Arafat’s policies turned increasingly toward the view that he had been avoiding decisive measures of repression against Islamist terrorism and its sponsors because he was not interested in putting an end to violence and in fact perceived it as a legitimate means of struggle even in the course of the Oslo process. Arafat was forced to take decisive measures against Hamas and the Islamic Jihad following the suicide bombings of February–March 1996 in Jerusalem, Tel Aviv, and Ashkelon. However, the scope of his measures was never repeated. Arafat used the Islamic opposition as an instrument in the face of Israeli delays and procrastination in the peace process, using rapprochement and antagonism vis-à-vis his own opposition in accordance with his needs vis-à-vis Israel.

In December 1995, before the elections to the PLC slated for January, Arafat’s delegates tacitly gave the green light to Hamas’s leadership in Cairo to continue its attacks against Israel as long as it did not “embarrass” the PA, namely, did not leave signs that the action had been initiated from PA-controlled areas. Arafat’s policy in this respect became a major obstacle in the peace process and a primary arguing point for all the opponents of the Oslo process in Israel.

Another argument against the PA was the continued incitement against Israel in the PA’s official media and school textbooks, perceived by many Israelis as a clear indication that the PA was not seeking peace and coexistence with Israel. This became apparent during Netanyahu’s government (1996–99), which, in the Wye Memorandum, insisted on reciprocity in implementing the agreement’s provisions, making it conditional on ending terrorism and incitement.

The main criticism of the Palestinian militant opposition organizations against the PA leadership revolved around the terms and modalities of the DOP. In this view, Arafat had made excessive concessions to Israel, leaving important issues up in the air, dependent on Israel’s goodwill, such as Jerusalem, the territory to be ceded to the PA, and most of all, the right of return for the Palestinian refugees. Criticism against the PA within the Palestinian community, primarily in the West Bank, hinged on the dominant role played by the PLO people arriving from Tunisia and other Arab states after capturing key positions at the expense of local inhabitants. This criticism may have been unjustified given the large number of local Palestinians in the PA’s bureaucracy, and yet it was and remained a dominant perception among many Palestinians. The international community of donors, which provided the bulk of the PA’s budget, expressed similar concerns about the lack of transparency and accountability and the general financial management of the PA.

By 1997, internal criticism of the PA grew vehement, revolving around Arafat’s authoritarian rule, the PA’s centralized decision-making process, mismanagement of financial allocations, and growing manifestations of corruption, abuse of power, and human rights violations by the security agencies and senior officials of the PA. The campaign of criticism came from within Fatah itself, particularly the younger members of the PLC. This led to the appointment of an investigative committee, whose report to the elected PA Council was submitted in the fall of 1997. The report revealed that $326 million (or 37% of the PA’s budget) was unaccounted for due to fraud, corruption, and mismanagement. The report also recommended the dismissal of three cabinet members on grounds of corruption. Although the three resigned, Arafat refused to accept their resignations or adopt the report, even though he accepted it in principle. In August 1998, after much procrastination and pressure from the critics, Arafat announced a new cabinet, enlarged by ten new members, leaving the three ministers charged with corruption in place and shifting the three leading critics within the cabinet to posts without portfolios. Though the new cabinet won a vote of confidence in the PLC, 28 members voted against it, of whom 11 were Fatah members. The reshuffle led to the resignation from the cabinet of the minister of agriculture, Abdel Jawad al-Saleh, and the minister of higher education, Hanan Ashrawi.

The foundation of the PA, along with the elections to its Council, finally shifted the center of gravity of Palestinian politics from outside the disputed territories to the Gaza Strip and West Bank. This centralization came to the fore in Arafat’s dual role as chairman of the PLO Executive Committee and PA chairman. This initially drew the criticism of many Palestinians, especially among the West Bank intellectual elite. However, this criticism diminished with the growing use of coercive means by the PA, along with policies of control, containment, and cooption of existing non-government organizations and institutions of higher education.

From the outset, the PA’s existence was marked by dependence on external financial sources due to the urgent need for infrastructure and economic development. To ensure the implementation of the Oslo Agreement, in October 1993, the major economic powers (particularly the U.S., Canada, the European Community, and Japan) met under the auspices of the World Bank to devise plans for financial aid to the PA. Pledges made in late 1993 reached $2.4 billion over four years (by late 1997, the total amount of pledges had reached $3.68 billion), of which a total of $1.8 billion was provided in two main forms: long-term projects for infrastructure, industry, and other development purposes; and short-term, stopgap measures such as creating new jobs to curtail unemployment and cover budgetary deficits.

The World Bank founded the Holst Fund (named after late Norwegian Foreign Minister Jorgen Holst) to marshal short-term aid. (This was originally intended to operate until late 1997 but was extended to 1998.) An Ad Hoc Liaison Committee was set up to monitor the disbursement process, while the PLO established PECDAR (the Palestine Economic Council for Development and Reconstruction) as the main vehicle for economic policy. For the first three projects of the World Bank’s Emergency Assistance Program (EAP), which were approved in May 1994, donors pledged an immediate $42 million. However, problems arose soon after the funds started flowing to the PA. There were discrepancies in accountability and transparency concerning how the financial aid was being spent.

Several PA ministries contended for primacy, including the PLO political department headed by Farouq Qaddumi. Other problems were caused by external economic circumstances, such as the Israeli curfews, roadblocks, and closures of Palestinian cities, imposed because of terrorist acts perpetrated by the Islamic opposition movements. The closures had an immediate effect on the Palestinian population’s ability to pay their taxes to the PA. Moreover, the PA-Israel economic agreement signed in 1994 in Paris remained mostly unimplemented.

All this came against the backdrop of years of an uprising (Intifada) and the large-scale expulsion of Palestinians from the Gulf states since 1990, reducing remittances from these Arab countries. Thus, much of the aid flowing to the PA was spent to make good the PLO’s deficits. In response, the donor nations tended to hold back further sums.

In August 1994, the UN appointed Terje Larsen, the initiator of the Oslo academic track negotiations, as the envoy in charge of the disbursement of funds in Gaza. Larsen’s plan included a new mechanism for controlling the funds through committees composed of representatives of both the PA and the donor countries. All the committees were to be devoted to key areas, such as creating jobs, education, infrastructure, etc.

Private Palestinian investors are another source of investment in the PA. They come mainly from Jordan, but some are from elsewhere in the Diaspora.

In 1993, Padico (Palestinian Development and Investment Company) was founded with a capital of $200 million. This initiative helped build factories and some tourist projects with the financial aid of Palestinians, Jordanian banks, and U.S. and Egyptian companies. Following the interim agreement in September 1995, U.S. Secretary of State Warren Christopher hosted an Ad Hoc Liaison Committee (AHLC) to create a framework for increased assistance to the PA by the European countries. More specifically, it was meant to support projects that addressed infrastructure needs and created employment opportunities for Palestinians. However, prospects for a larger scope of private investment by Palestinians faded because of the PA’s centralized economy and the sense of insecurity caused by terrorist attacks and closures. These obstacles to sustained economic development culminated in the virtual halt of the Oslo process after the formation of a right-wing government in Israel headed by Binyamin Netanyahu (May 1996).

The Netanyahu term as prime minister led to a significant erosion of PA trust in Israeli intentions regarding the future implementation of the DOP. The Hasmonean Tunnel riots of September 1996 (in which the Palestinians lost 79 people) essentially set the tone for the next two years of Netanyahu’s stay in power, despite the agreements the latter signed with Arafat – the Hebron Agreement (January 1997) and the Wye Memorandum (October 1998). While the Hebron Agreement was fully implemented, the Wye Memorandum, which accounted for further Israeli redeployments to bring about the final status talks, was only partly implemented.

In addition, other issues on the agenda remained long-delayed, such as the release of prisoners from Israeli prisons, opening the “safe passage” from the Gaza Strip to the West Bank, and building a harbor and airport in the Gaza Strip (the latter was finally opened in 1998). At the same time, the economic conditions of the Palestinian population constantly deteriorated due to repeated closures imposed by Israel following terrorist attacks on its civilians inside the “Green Line.”

The advent of a Labor-led government headed by Ehud Barak in May 1999 raised Palestinian expectations for rapid progress in the peace-making process. However, the continued delay in implementing further Israeli deployments and fear that Barak was trying to gain time and achieve a settlement with Syria first sowed increasing doubts about the prospects for a breakthrough in the Oslo process.

The growing economic depression and continued diplomatic stalemate aggravated the PA’s legitimacy problem and significantly shaped its political conduct. Arafat’s legitimacy problem was manifested by the growing opposition within his Fatah organization. In this context, from the fall of 1998, Arafat made repeated declarations regarding his intention to proclaim an independent Palestinian state by May 4, 1999 (the deadline for reaching a final status agreement). These declarations apparently meant to pressure Israel into moving faster in implementing further redeployments in the West Bank, met with widespread international objections and forced Arafat to back down from such a unilateral measure. However, this was another setback for the PA and Arafat, further eroding his standing.

In November 1999, 20 academics and members of the PLC – including Fatah members – signed a declaration condemning the peace process as a conspiracy against Palestinian national aspirations and accusing PA leaders of corruption and oppression. Although Arafat was not directly blamed for the stalemate and corruption, this petition was yet another indication of the growing impatience among Palestinians with the PA’s performance on both the diplomatic and economic fronts.

From December 1999–January 2000, the PA enjoyed a temporary respite due to the celebration of the new millennium. In the previous years, both Israel and the PA had made efforts to prepare for expected waves of pilgrims and tourists, with not much coordination, though each side invested a great deal of financial and administrative effort in these preparations (the number of hotel rooms in Bethlehem was doubled within two years). In March, Arafat hosted Pope John Paul in his visit to PA-controlled Bethlehem.

The al-Aqsa Intifada and Aftermath

Given the failure of the Camp David summit and subsequent American mediation efforts to bring about an agreed-upon Framework Agreement for Permanent Status, the growing Palestinian frustration culminated in the eruption of the al-Aqsa Intifada in late September 2000. Though some falsely blamed the riots on the visit of Ariel Sharon to the Temple Mount, the continued violence and its encouragement by Arafat pointed to the underlying causes, namely, frustration over the stalemated Oslo process and the PA’s conduct as a governing institution.

After the outbreak of the violence, dozens of representatives of the multi-factional Intifada leadership met with Arafat and urged him to declare war against corruption. The demand to stop the embezzlement of funds led to the assassination of the head of the PA’s broadcasting service, allegedly on grounds of transferring funds to his account. The perpetrators, identified with Fatah’s armed branch (Tanzim), were never prosecuted.

These events had some effect on the willingness of potential donors to continue providing funds to the PA. Thus, the Arab League refused to transfer millions of dollars in aid to the PA out of fear that top officials would get their hands on the money. Western donors, however, while reducing aid transfers, also changed priorities in aid commitments. Thus, fewer funds were disbursed for direct budget needs, and more was allocated for specific projects and emergency aid.

The continued violence and Israeli reprisals – directed at the PA’s offices, security headquarters, police stations, prisons, and, finally, the symbols of authority connected with Arafat himself, brought about a steady and systematic destruction of the PA’s capabilities and risked its very existence. Under Sharon’s leadership, Israeli policies toward Arafat became more severe.

The increasing terrorist attacks by Palestinians of all factions, with Fatah taking the lead, and unprecedented understanding of Israel’s need to fight terrorism following the September 11, 2001, attacks in New York and Washington and the capture of Karin A, a boat manned by Palestinian security personnel loaded with arms provided and financed for by Iran, led Israel to intensify its attacks on the PA’s symbols of authority. In December, the government declared Arafat “irrelevant” after placing him under virtual house arrest at his headquarters in Ramallah and preventing his arrival in Bethlehem for the Christmas Mass at the Church of the Nativity. This was followed by Israeli statements, especially from right-wing politicians, expressing the wish to expel or get rid of Arafat, ostensibly to allow an alternative leadership to take over with whom Israel could negotiate. The deterioration of security in Israeli cities due to the increasing wave of suicide bombings culminated in Israel’s invasion of PA areas and the “isolation” of Arafat in his office while it raided Palestinian cities, refugee camps, and villages throughout April 2002 to destroy the terrorist infrastructure.

Although the Israeli incursion (“Operation Defensive Shield“) temporarily shifted international criticism from Arafat to Israel, it brought the PA to its lowest point ever, leaving in its wake tremendous destruction and disarray after four weeks of operations, a heavy Israeli military presence around the cities of the West Bank and continuous Israeli military raids to destroy the Palestinian terrorist infrastructure. Henceforth, Palestinian terrorism was reduced considerably in the West Bank.

From this point on, international pressure, driven mostly by President Bush, who was stunned by Arafat’s complicity in the Karin A affair with the Iranian “axis of evil,” aimed at marginalizing and ultimately removing Arafat from political life. Under the banner of reforming the PA, the United States and eventually the European Union insisted that a position of prime minister be established responsible for reform, chiefly to unify the dozen or so security forces in the PA;, that a technocrat with international experience and reputation be made finance minister; and that all revenue and expenditure, especially the payroll of PA personnel, be under the jurisdiction of the Ministry of Finance. Arafat was known for personally paying security personnel and other public servants; this made it difficult, if not impossible to ensure that international aid, which accounted for over 60% of PA revenue, would not be diverted to terrorism. United States pressure came in the form of inaction; it henceforth hardly criticized Israeli military moves directed against Palestinian terrorism and was only slightly more assertive when Israel began building the security fence in July 2002, mostly in the territory within Judea and Samaria.

Along with the stick, however, came an important carrot. In a speech in June 2002, President Bush, for the first time, committed the United States to the establishment of a Palestinian state. According to the roadmap plan based on the speech sanctioned by Russia, the European Union, and Egypt on September 17, 2002, the PA was to begin dismantling Palestinian terrorist organizations in its midst. Israel would then withdraw its forces from area “A” in the West Bank, paving the way for the establishment, no later than the end of 2003, of an interim internationally recognized Palestinian state. Final status negotiations would then ensue. The plan envisioned a permanent Palestinian state by 2005.

Arafat was concerned reform would undermine, if not destroy, his political base. And all this to achieve an interim state with 42% of the territory when he could have had a permanent state with more than 96% of the territory if he had agreed to the proposal offered in July 2000.

By May 2002, at a conference in Ramallah, major Palestinian civic leaders were calling for a united command of the factions, including Hamas. In Gaza, half-measures to curtail Hamas terrorist attacks had led in September 2002 to the murder of the head of the riot prevention squad, a lieutenant colonel, by Hamas activists, and though the killers were known, local security personnel were not willing to arrest them.

Arafat was slowly losing his legendary grip on Palestinian politics. Gaza, where terrorism against settlers and across the Green Line increased between 2002 and 2005 in contrast to its reduction in Judea and Samaria, also became the scene of increasing internal dissent expressed in the rising frequency of fights between Hamas and Fatah, inter-Fatah violence and the kidnapping of foreigners and officials. Lawlessness reached its height in July 2004 when Arafat, ostensibly as part of the reform package of uniting the security forces, appointed Musa Arafat, the head of military intelligence loathed by Fatah activists, as director of security in Gaza. Fatah activists in large numbers turned against their leader for the first time with massive violence against security personnel for over two weeks. Musa Arafat faced two assassination attempts and eventually was murdered in a raid on his home in September 2005.

Though powerless to prevent the creation of the new office of prime minister given to Mahmoud Abbas in April 2003 and the appointment of Salam Fayyad, a respected economist and former senior official in the World Bank, as minister of finance, Arafat succeeded in preventing both the unification of the security forces and the payment of security personnel in the official payroll, leading Mahmoud Abbas to resign in September 2003.

Arafat died in November 2004. Abbas succeeded him as head of the PLO and PA.

Abbas Takes Control

To enhance his authority without too much loss of legitimacy and to buy time until he could rebuild the PA’s security forces, Abbas decided to hold presidential elections first and postpone legislative elections until later. His strategy seemed to be successful when the young guard leader of Fatah, Marwan Barghouti, first decided from an Israeli jail to contest the presidency and then withdrew under public pressure, allowing Abbas to win nearly 80% of the vote in the elections of January 9, 2005.

After the elections, however, Abbas, a senior bureaucratic official without any “fighting” past, seemed to lose the opportunity to assert his authority; besides forcing some aging and ineffective senior security personnel to retire, Abbas did very little to get security personnel to act. Though they abounded on the payroll (an estimated 50,000 received salaries, they were not willing to restore law and order in Gaza, which, after the total Israeli withdrawal in the summer of 2005, became the litmus test of the PA’s capabilities to govern. To some extent, the results of four rounds of local elections conducted through 2005, in which Hamas-affiliated lists did better than those affiliated to Fatah, were an indication of the PA’s ability and the leader at its head to improve governance.

The crushing blow came in the January 2006 legislative elections, when Hamas won a parliamentary majority that gave it effective control of the PA apparatus. Given this new reality, coupled with the considerable lawlessness in the PA and the novelty of a weak leader at the helm of a political entity in the Middle East, in 2006, the PA’s fate, along with the future of Palestinian statehood, remained in question.

Developments From 2014-18

On December 31, 2014, the Palestinian Authority released a document showing that they had accepted Article 12 Paragraph 3 of the Rome Statute and were officially accepting the jurisdiction of the International Criminal Court to conduct investigations into alleged war crimes committed by Israel since June 13, 2014.

Israel responded by freezing $127 million in Palestinian tax revenues it had collected. Israeli legal organization Shurat HaDin filed war crimes lawsuits on January 5, 2015, against three heads of the Palestinian Authority – Prime Minister Rami Hamdallah, Minister Jibril Rajoub, and Palestinian Authority intelligence chief Majed Faraj. The lawsuit claimed that during Operation Protective Edge, Fatah members and officials “openly boasted in Facebook pages and other media channels that it launched projectiles that caused the injury and death of Israeli civilians.” The war crimes accusations brought against the Palestinian Authority officials also detail the torture and murder of Palestinian citizens carried out by members of Fatah and Hamas. The statement released by Shurat HaDin alleged: “Faraj and Hamdallah, as commanders in the Palestinian security services, are directly responsible for widespread human rights violations committed [in the West Bank] against regular Palestinians by units under their authority.” Nothing came of the lawsuit.

U.S. Secretary of State John Kerry criticized Israel for withholding tax revenues and stated that he was concerned about the “continued viability of the Palestinian Authority if they do not receive funds soon.” In the first two months of 2015, Israel refused to release two payments of tax revenues totaling more than $200 million. Israel announced on March 27, 2015, the money would be transferred due to humanitarian considerations and international pressure.

Abbas complained in the days following the release of these funds that the money was not enough. The Palestinian Authority was over $500 million in debt to the Israel Electric Corporation, and the Israeli government took $40,000 of these frozen funds to pay for part of this debt before they turned the funds over. Abbas threatened to take their case to the International Criminal Court if Israel did not return all their frozen tax revenues.

In April 2015, Qatar announced it would provide $100 million to the Palestinian Authority to support reconstruction and alleviate aspects of its financial crisis.

Palestinian Authority officials met with the Coordinator of Government Activities in the Territories, Maj. Gen. Yoav Mordechai and worked out a compromise agreement for the release of the frozen Palestinian tax revenues on April 18, 2015. The Palestinians agreed to receive a significantly reduced amount to offset their debts to the Israel Electric Corporation. The initial transfer of funds was 1.5 billion shekels, minus 500 million to pay the electricity debt. Approximately 850 million more shekels were agreed to be transferred later, covering the tax revenues from March and April 2015. Altogether the Palestinian Authority agreed to accept 1.85 billion shekels of their frozen tax revenues under the agreement.

The Palestinian Authority conducted a series of raids against Hamas members during the weekend of July 4, 2015. Hamas officials claimed that during the weekend, approximately 120 Hamas supporters and activists (including some students) were rounded up and detained by the Palestinian Authority in the West Bank. A spike in the number of terror attacks perpetuated by Hamas supporters during the prior month likely caused this crackdown. Israeli officials provided the Palestinian Authority with intelligence that led to at least some of these captures.

Documents leaked online in August 2015 exposing corruption and misuse of funds by Palestinian Authority leadership sparked outrage on social media from Palestinians who were struggling economically. The documents included a request to Bahrain to fund a $4 million private housing development in an upscale area of Ramallah specifically for Palestinian Authority officials to live in and a proposal that the Palestinian government pay $15,000 for the private education of the daughter of one of their officials and medical treatment for his family. A spokesperson from the corruption watchdog group Transparency International stated that “there are big black holes in the Palestinian financial and administrative systems that need to be reformed.”

Zionist Union leader Isaac Herzog met with Abbas on August 19, 2015, to discuss increasing violence. Both men agreed that they wanted to prevent a third intifada from breaking out and resolved to fight homegrown terrorism more aggressively, as well as diplomatically. Herzog stated following the meeting that the Israelis and Palestinians must “ignite the [peace] process yet again and give it another effort.” He believed that he and Abbas could reach a peace agreement within two years.

During an address to the United Nations General Assembly on September 30, 2015, Abbas asserted that the PA was no longer bound by the Oslo Accords as well as all subsequent agreements between the PA and Israel.

Palestinian Authority leaders incited civilians to carry out terror attacks against Israelis during the “days of rage” in September and October 2015, fueled by lies about Israeli authorities changing the long-standing rules of access to Muslim holy sites in Jerusalem. Between September 13 and October 25, 2015, ten Israelis were killed in lone-wolf stabbing, rock-throwing, and automotive terror attacks, and more than 70 were injured. In response to Palestinian leaders encouraging their constituents to carry out these attacks, the United States slashed aid to the Palestinian Authority by $80 million for the fiscal year ending September 30, 2016. This represents a 22% cut from the State Department’s initial budget request earlier in the year. Florida Republican Ileana Ros-Lehtinen authored a Foreign Affairs Committee Resolution, which was unanimously approved on October 22, 2015, calling for Abbas and other Palestinian leaders to be held accountable for the new wave of violence. Ros-Lehtinen issued a statement calling upon Abbas to “[stop] inciting violence and promoting hatred, [and] to call for calm and work with the Israelis to restore the peace.”

The Palestinian Authority celebrated the opening of its embassy in Brazil on February 3, 2016, the first Palestinian Authority embassy in the Western Hemisphere. The proximity of the embassy to other Brazilian government buildings made some officials uneasy, with a military source speaking under the condition of anonymity stating, “the site is strategic. Terrorists could access the whole governmental structure in a half an hour.” Topped with a golden dome and measuring 17,000 square feet, the Palestinian Authority embassy is one of the largest and most lavish embassies in the country.

Palestinian Authority Prime Minister Rami Hamdallah announced on February 9, 2016, that his government was ready and willing to step down and allow a new national unity government to take its place. This announcement came after two days of Fatah and Hamas reconciliation discussions in Doha, Qatar. Hamas released a statement confirming that they are “ready to form a new unity government without preconditions” and called for the formation of “a new government to solve the current problems.” Reconciliation talks would continue on and off from that point on; however, no agreement was reached as of October 2019.

Palestinian Authority Minister of Finance Shukri Bishara confirmed rumors on February 22, 2016, that he had been meeting with his Israeli counterpart, Moshe Kahlon, in Jerusalem to discuss an agreement to boost the Palestinian economy. Bishara said that these meetings were being held to hash out an agreement on tax revenues that Israel collects on the Palestinian Authority’s behalf.

In May 2016, Norwegian Foreign Minister Borge Brende met with Palestinian Authority President Mahmoud Abbas, and during these meetings, he made a point to emphasize to Abbas that aid money coming from Norway was explicitly not to be spent on paying salaries of convicted terrorists. Brende told Abbas that the policy of making financial payments to convicted terrorists and their families that “increased by the length of prisoners’ sentences” is “unacceptable and should be abolished.” The Palestinian leader assured Brende that Norwegian aid money given to the Palestinian Authority would be spent on “state-building and institutional development.”

Human Rights Watch stated in late August 2016 that the Palestinian Authority in the West Bank as well as Hamas in the Gaza Strip, were “arresting, abusing, and criminally charging journalists and activists who express peaceful criticism of the authorities.” Sari Bashi stated that “the Palestinian governments in both Gaza and the West Bank are arresting and even physically abusing activists and journalists who express criticism on important public issues.”

The PA, which is responsible for governing roughly 98% of the Palestinians in the West Bank, does not allow basic civil rights. It persecutes journalists and does not respect the freedom of the press. Similarly, it does not allow freedom of speech or assembly.

The British government suspended aid payments to the Palestinian Authority in September 2016, pending an investigation into whether the aid money was ending up in the hands of terrorists. The decision to withhold a third of the aid to the PA during the fiscal year, 25 million euros, was made by the Department for International Development. In December 2016, the UK Department for International Development announced that it would be restructuring its aid program to the Palestinian Authority, promising to focus more on “vital health and education services,” as well as “the salaries of health and education public servants on a vetted list only.” The department clarified that they would no longer be providing aid to PA workers in Gaza. UK Prime Minister Teresa May stated on December 19, 2016, “let me be clear: no British taxpayers’ money will be used to make payments to terrorists or their families. It is right that Priti Patel has called for an examination of aid spending in the Occupied Palestinian Territories to ensure that every penny is spent in the right places and in the right way.”

A Memorandum of Understanding was signed between Israeli and Palestinian Authority officials on September 3, 2016, allowing international mail to enter areas under PA control directly without first going through the Israeli mail service. A similar agreement was signed in 2008 but was never implemented.

On September 13, 2016, Israeli and Palestinian Authority officials announced that they had reached a deal to resolve the PA’s outstanding electricity debt of approximately $580 million to the Israelis. The parties agreed the PA would pay Israel an initial lump sum of $132 million, followed by 48 installments amounting to $397 million.

Officials from the PA announced on January 3, 2017, that they had run a budget deficit of $1.06 billion in 2016. Prime Minister Rami Hamdallah stated that the Palestinian governing body had expected to receive $1.2 billion in external monetary support, but only $640 million was received. During 2016, many countries suspended or decreased their aid packages to the Palestinian Authority, including Saudi Arabia, the United States, the United Kingdom, and the European Union.

The Palestinian Authority announced on April 6, 2017, that they would be slashing by a third the salaries of thousands of government employees who have not been able to work since Hamas took over. The Palestinian Authority has continued to pay the salaries of civil servants and government employees since 2007. These salary cuts were largely due to dwindling foreign aid.

The Australian government announced the suspension of all foreign aid to the Palestinian Authority on July 1, 2018, because of objections to the funding of Palestinian terrorists and their families.

Payments to Prisoners and Martyrs

The Palestinian Authority’s 2018 budget allocated $360 million for the Prisoners and Martyrs Fund, which pays out handsome salaries to convicted terrorists and their families.

During their meeting in Bethlehem on May 23, 2017, President Donald Trump angrily accused Mahmoud Abbas of lying to him at their May 3 meeting in Washington, D.C., when the Palestinian Authority president insisted that the PA did not engage in incitement against Israelis and Jews. Trump was also furious about the PA’s “pay-for-slay“ policy of providing salaries to convicted Palestinian terrorists in Israeli prisons and reiterated the demand he had made at the White House for Abbas to end the practice.

On June 13, 2017, Secretary of State Rex Tillerson told senators that pressure from the president led the PA to change its policy. Palestinian officials, however, quickly denied Tillerson’s claim. “There is no end to the payments” of Palestinian prisoners, declared Issa Karake, head of the Palestinian Committee of Prisoners’ Affairs. “We reject ending the subsidies to the prisoners and families of martyrs. We will not apologize for it.”

According to Karake, Abbas told Trump he would not “stop the allowances of the families of the prisoners and Martyrs (Shahids), and emphasized his absolute support for them (i.e., for the payments).” Other Palestinian officials made similar comments.

Following the Palestinian statements, Tillerson modified his testimony before a House committee on June 14, 2017, saying the United States was engaged in an “active discussion” on the payments and that “we’ve taken the position to the Palestinian Authority in a very unequivocal way.” Tillerson said he told the Palestinians, “You either take care of this yourself or someone else will take care of it for you.”

In a meeting with Palestinian officials on June 20, 2017, Trump’s envoy Jason Greenblatt, reiterated the demand that the Palestinians cease payments to the so-called Martyr’s Fund. A Palestinian official said the meeting did not go well, and the request was rejected. Reportedly, the PA increased payments to terrorists and their families in 2018 by nearly $56 million after distributing $347 million in 2017.

Meanwhile, Congress is considering legislation, the Taylor Force Act, which would cut U.S. funding to the Palestinian Authority if it continues to provide monetary support to the families of those who commit acts of terror against Israelis and others.

The Australian government announced the suspension of all foreign aid to the Palestinian Authority on July 1, 2018, because the funds would likely be used to pay Palestinian terrorists and their families.

On July 2, 2018, the Israeli Knesset passed a bill that withholds tax transfers to the Palestinian Authority due to their funding of terrorists and their families. The bill, which aims to help end the pay-for-slay policy implemented by the Palestinian Authority, was passed in a vote of 87-15.

The Trump administration cut off funds to the PA and UNRWA, but the Biden administration restored and increased funding as it sought to repair relations with the Palestinians and demonstrate it would adopt a more sympathetic position regarding their interests. Unlike his predecessors, however, President Joe Biden did not see any opportunity for launching a new peace initiative given the positions of the Israeli and Palestinian leadership. His unwillingness to pressure Israel and take punitive measures in response to Israeli policies further frustrated Palestinian officials.

Meanwhile, the denial of rights and corruption within the PA, along with Abbas’s failure to advance toward independence, made him increasingly unpopular, with polls showing more than 60% of the public wanting him to resign.

The PA Rejects West Bank Division

In late August 2019, the PA announced it would no longer recognize the division of the West Bank into Area A, B, and C as specified in the Oslo Accords and would regard the entire West Bank as sovereign Palestinian territories.

Arab States Cut Aid

The PA has relied on aid from Arab states to cover much of its budget. The Gulf states, however, have become increasingly frustrated by Palestinian resistance to negotiations and compromise with Israel. The Abraham Accords signaled a major change in their position after years of insisting Israel permit the establishment of a Palestinian state before any Gulf state would normalize relations with Israel. Palestinian condemnation of the agreements by Bahrain and the UAE further aggravated relations.

The shift in policy is also reflected in the reduction of aid to the PA. According to the Anadolu Agency, funding from Arab countries dramatically decreased from $265.5 million in 2019 to $40 million in 2020. The biggest reduction was from Saudi Arabia, which reduced its assistance by more than 80% from $174.7 million to $32.5.

Worldwide financial aid to Palestine declined from $538.3 million in 2019 to $369.7 million in 2020. In 2021, the budget deficit was $1.26 billion.

Abbas Turns to China

China has quietly become more involved in the PA as it seeks to expand its influence throughout the Middle East. In 2018, for example, China funded highway projects to ease traffic in and around Ramallah. China also funded a school for male students in the city in 2021.

In 2023, Abbas met with Chinese leader Xi Jinping in Beijing and signed a “strategic partnership” agreement. The Chinese only agreed to improve road infrastructure in Ramallah, implement Chinese language programs in Palestinian schools, and offer visa exemptions to Palestinians with diplomatic passports. Xi offered to facilitate peace talks between Israel and the Palestinians and a peace plan similar to the ones he floated previously that support the Palestinian demand for the creation of a Palestinian state based on Israel’s pre-1967 borders, with eastern Jerusalem as its capital. China showed no interest, however, in trying to pressure Israel.

Though Israel has a good relationship with China, which is now its third leading trade partner, the Communist government has never been supportive diplomatically and routinely votes for UN resolutions critical of Israel. Historically, China has voted against Israel at the United Nations and condemned Israel’s defensive operations against Palestinian terror attacks for supposedly using “excessive force.”

Senior Vice President for Research of the Foundation for the Defense of Democracies Jonathan Schanzer observed, “The Palestinian decision to align itself with China amidst an uptick in great power competition and a surge of diplomatic activity by China in the Middle East is a finger in the eye of the Biden administration. This is a litmus test for the Biden White House, which has been an advocate for the Palestinian cause. There must be consequences for Mahmoud Abbas if the goal is to sustain the U.S.-led regional order.”

Abbas Fires Governors

The PA is administratively divided into 16 governorates: five in the Gaza Strip and eleven in the West Bank (including Jerusalem). On August 10, 2023, Abbas fired all four of Gaza’s active governors (the fifth post has been vacant since the last governor died in 2020) and 11 in the West Bank, leaving only those in Jerusalem, Ramallah, and Salfit.

The reason for the upheaval was unclear. Ghaith al-Omari, a former advisor to the Palestinian Authority, speculated one explanation might be that it was meant to “assuage international diplomatic worries about their hold on power” and “to create a sense of change in the PA to counter its ossified image.” Al-Omari also suggested that “Abbas stands to benefit politically from this competition” of senior Fatah officials for the positions.

Following the Hamas massacre of Israelis on October 7, 2023, several European officials announced funding to the Palestinian Authority and NGOs would be frozen. The EU announced it suspended all payments and will review future support for Palestinians in its entirety before resuming aid. Austria issued a similar statement. The German and Norwegian governments were reviewing their funding. Switzerland announced the cancellation of contracts with three NGOs.

A Return to Gaza?

Palestinian officials in the West Bank praised Hamas, and public opinion supported the attack on Israel. A PA official even boasted that members of Fatah’s terror wing, the Al-Aqsa Martyrs’ Brigades, had participated in the massacre. Israel sent troops into the West Bank to root out members of Hamas and other terrorists. Even as the ground offensive was in full swing in Gaza, counterterror operations were conducted almost daily in the refugee camps and other hideouts in the PA. Most terror attacks were thwarted, but several took the lives of Israelis.

Despite the corruption, incitement, and violence emanating from the PA, the Biden administration was pressuring Israel to accept a “revamped and revitalized” PA to take control of Gaza after the war ended. The entire PA government, including Prime Minister Mohammad Shtayyeh, submitted its resignation in an effort to show the United States that it was willing to make changes. Despite an overwhelming majority of Gazans calling for him to resign, Abbas did not. His four-year term was now in its 19th year.

Israeli officials had little or no faith that the PA would change and pointed out it had ruled Gaza unsuccessfully before being overthrown by Hamas. Netanyahu insisted that a buffer zone be created near the border and that Israeli troops have freedom of action in Gaza as they do in the West Bank. He said, “I will not allow the State of Israel to repeat the critical mistake of Oslo, which brought to the heart of our land—and to Gaza—the most extreme elements in the entire Arab world, who are committed to the destruction of the State of Israel and who teach that goal to their children.”

Some analysts, including Israelis, did not believe there was an alternative to the PA. Israelis insisted that the PA would have to do more than make cosmetic changes. Maurice Hirsch and Yossi Kuperwasser, for example, said the PA would have to condemn the October 7 massacre, end the pay-for-slay policy, recognize Israel as the state of the Jewish people, cease all incitement to murder and glorification of terror, immediately halt all PA attacks on Israel in international forums, and actively fight terror.

PA officials were also talking about including Hamas in the reformed government, a non-starter for Israel. They also were wary of taking control of Gaza and being seen as tools of the Israelis.

Abbas Appoints New Government

The United States was pushing Israel to accept a “revitalized” PA to govern Gaza after the war with Hamas ended. Israel was adamantly opposed to the idea because of the PA’s ongoing incitement, glorification of terrorists, “pay-to-slay” policy, and educational system indoctrinating young Palestinians to hate Israel. Ignoring Israeli objections, Abbas formed a new government in March 2024 that he hoped would satisfy the Biden administration sufficiently to convince it to force Israel to accept the PA as ruler of Gaza. 

Abbas appointed 23 ministers to form his new cabinet, all loyalists from Fatah. Mohammad Mustafa, a longtime Abbas adviser, was chosen as prime minister. At least two ministers had made statements in the past that indicated they were anti-Semitic and supported terror, which, combined with Abbas’s continuing refusal to hold elections, did not inspire confidence. Nevertheless, Abbas hoped to capitalize on the international anger toward Israel to seek full membership at the UN.

A Renewed Bid for Palestinian Statehood at the UN

On May 10, 2024, following another unsuccessful attempt to gain official UN Member State status at the Security Council, which was vetoed by the US, the Palestinians sought to circumvent the body by turning to the General Assembly. Draft resolution A/ES-10/L.30/Rev.1, presented on their behalf, resulted in an unprecedented upgrade of the observer status for the Palestinian delegation. This upgrade granted them all rights and privileges typically reserved for a Member State, except for the right to vote in the General Assembly or to nominate candidates to United Nations organs. The resolution passed with a vote of 143-9, with 25 abstentions, despite strong objections from Israel and the U.S. 

Meanwhile, Israel withheld tax revenues it collected for the PA, which added to its financial crisis. The World Bank reported in late May 2024 that the PA’s fiscal situation “dramatically worsened in the last three months, significantly raising the risk of a fiscal collapse. Revenue streams have largely dried up due to the drastic reduction in clearance revenue transfers payable to the Palestinian Authority and a massive drop in economic activity.” Despite the economic collapse, the PA continued the pay-to-slay policy, which further drained the government coffers, which already were $682 million in arrears with the World Bank predicting that figure to double.

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