International

US welcomes Israel lifeline for Palestinian banking

US welcomes Israel lifeline for Palestinian banking

The United States on Monday welcomed Israel’s one-year extension of a lifeline to Palestinian banks, after threats by the far-right finance minister to sever the connection amid the Gaza war.

The United States had pressed Israel to maintain the waiver which allows Israeli banks to work with Palestinian ones, fearing otherwise that the comparatively stable West Bank would descend into economic havoc.

The State and Treasury Departments in a joint statement said they welcomed the decision taken Thursday at a meeting of Israel’s security cabinet.

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“Economic stability in the West Bank is essential for Israeli and Palestinian security, and correspondent banking is a key pillar of that economic stability,” the statement said.

“The United States appreciates the ongoing engagement with the Government of Israel and the Palestine Monetary Authority on this matter.”

Far-right Finance Minister Bezalel Smotrich, who lives in a West Bank settlement and advocates for the full annexation of the territory occupied by Israel since 1967, earlier threatened to end the waiver in retaliation for three European countries’ recognition of a Palestinian state.

US Treasury Secretary Janet Yellen has warned that cutting off Palestinian banks “would create a humanitarian crisis” and voiced disappointment in October when Israel approved only a 30-day extension.

US welcomes Israel lifeline for Palestinian banking

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