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June 24, 2007 
Israel Agrees to Transfer Frozen Tax Funds to Palestinians

Jerusalem
Israel's cabinet voted Sunday to release tax funds collected on behalf of the Palestinian Authority as a means of strengthening the new emergency Palestinian government set up in the wake of the collapse of the Hamas-led national unity cabinet.

The money - the exact amount not known - would be handed over in phases, in order to ensure it does not find its way to anti-Israel militants, reports on the cabinet decision said.

The funds had been withheld following Hamas' refusal, after it took power following its January 2006 election victory, to recognise Israel's right to exist.

The transfer is part of a series of confidence-building measures Israeli Premier Ehud Olmert has proposed in order to back the new government, headed by independent lawmaker Salam Fayyad and set up to replace the national unity cabinet.

The unity government was dissolved by President Mahmoud Abbas following Hamas' violent takeover of the Gaza Strip during savage fighting against the president's Fatah party two weeks ago.

The cabinet decision comes a day ahead of a four-way summit, scheduled to take place Monday in the Egyptian resort town of Sharm el-Sheikh, in which Olmert, Abbas, Egyptian President Hosny Mubarak and Jordanian King Abdullah II are to participate.

The summit is set to focus on ways of helping the new Palestinian government.

Hamas' conquest of the Gaza Strip, and the new government set up by Abbas, created a new diplomatic situation, Israeli Foreign Minister Tzipi Livni told the cabinet Sunday.

"Gaza is turning into a security challenge, while the new government creates opportunities for cooperation and diplomatic progress," she said. 

DPA | June 24, 2007  

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