PA PM: US policies make Palestinians unable to agree to any deal; “Agreeing to [Israel’s tax] deductions is an implied admission of funding terrorism”

Headline: “Shtayyeh met with the German minister of state for foreign affairs and discussed the recent developments with him”

“[PA] Prime Minister Muhammad Shtayyeh met in his office in Ramallah yesterday [June 16, 2019] with German Minister of State for Foreign Affairs Niels Annen…
Shtayyeh again emphasized the Palestinian opposition to the deal of the century (refers to US President Donald Trump’s as yet unpublished Middle East peace plan –Ed.), and said: ‘Our opposition to the deal of the century stems from the fact that [US President Donald] Trump's administration transferred the [US] embassy to Jerusalem (see note below –Ed.), closed the PLO offices in Washington (see note below –Ed.), and is waging an economic war that includes drying up the monetary resources of UNRWA (UN Relief and Works Agency for Palestine Refugees in the Near East; see note below –Ed.) – so how it is possible to agree to this deal, while the steps he has implemented on the ground are worse than the expected phrasing of the deal of the century?’
The prime minister added: ‘How can the Trump administration, which is waging an economic and political war against the PLO, organize the Manama Conference (refers to US-led conference to be held in Bahrain in late June 2019 focusing on economic aspects of Trump’s Middle East peace plan –Ed.) and claim that it is meant to improve the economic situation of the Palestinians?’
Shtayyeh continued: ‘We are not prepared to accept the tax money that is not in full (refers to Israel’s Anti “Pay-for-Slay” Law to deduct terror salaries; see note below –Ed.) for two reasons, political and legal; agreeing to these deductions is an implied admission of funding terrorism, which will lead to putting the PA and the banks on trial.’”

US recognition of Jerusalem as capital of Israel - On Dec. 6, 2017, US President Donald Trump formally recognized Jerusalem as Israel’s capital. Trump added that the final borders of Jerusalem will be determined during negotiations. The US embassy was transferred from Tel Aviv and opened in Jerusalem on May 14, 2018, the anniversary of Israel's declaration of independence in 1948 according to the Gregorian calendar.

PLO US office closure - On Sept. 10, 2018,the US State Department announced the closure of the PLO US office, saying that there was no indication that the Palestinians had entered into meaningful negotiations with Israel. This was subsequent to the Trump administration announcing on Nov. 17, 2017, that the PLO has violated a 2015 Congressional mandate, which states that the PLO cannot operate an office in Washington if the Palestinians try to get the International Criminal Court to prosecute Israelis for crimes against the Palestinians. US Secretary of State Rex Tillerson determined that the Palestinians violated this mandate in September 2017, when PA Chairman Mahmoud Abbas called on the International Criminal Court to investigate and prosecute Israelis while speaking at the UN.

US President Donald Trump's administration announced on Aug. 31, 2018 that it was immediately cutting all $360 million of annual American funding to UNRWA (UN Relief and Works Agency for Palestine Refugees in the Near East). Explaining the decision, the US State Department said, "The fundamental business model and fiscal practices that have marked UNRWA for years – tied to UNRWA’s endlessly and exponentially expanding community of entitled beneficiaries – is simply unsustainable and has been in crisis mode for many years. The United States will no longer commit further funding to this irredeemably flawed operation."
The move came after the US froze two planned payments to UNRWA in early January 2018 for more than $100 million, and the US administration spoke about the need to reexamine and conduct a reform of the UN body. This occurred after the PA refused to negotiate with Israel and cut diplomatic ties with America following US recognition of Jerusalem as Israel's capital on Dec. 6, 2017.

Israel's Anti "Pay-for-Slay" Law - Israeli law stating that the PA payments to terrorists and the families of dead terrorists is a financial incentive to terror. The law instructs the state to deduct and freeze the amount of money the PA pays in salaries to imprisoned terrorists and families of "Martyrs" from the tax money Israel collects for the PA. Should the PA stop these payments for a full year, the Israeli government would have the option of giving all or part of the frozen money to the PA. The law was enacted by the Israeli Parliament on July 2, 2018. During the parliamentary vote, the law's sponsor Avi Dichter said: “The Foreign Affairs and Defense Committee received much help in its deliberations... from Palestinian Media Watch who provided us with authentic data that enabled productive and professional deliberations, nuances that are very difficult to achieve without precise data.” [Israeli Parliament website, July 2, 2018] In accordance with the law, as of September 2021 Israel’s Security Cabinet had ordered the freeze of 1.857 billion shekels ($580.15 million) - the sum equivalent to the PA payments to terrorists in 2018, 2019, and 2020.