Israel Blocks Funds as Hamas Takes Power

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Israeli interim Prime Minister Ehud Olmert and Foreign Minister Tzipi Livni i

Israeli interim Prime Minister Ehud Olmert, right, and Foreign Minister Tzipi Livni attend the weekly cabinet meeting in Jerusalem, Feb. 19, 2006. Reuters hide caption

itoggle caption Reuters
Israeli interim Prime Minister Ehud Olmert and Foreign Minister Tzipi Livni

Israeli interim Prime Minister Ehud Olmert, right, and Foreign Minister Tzipi Livni attend the weekly cabinet meeting in Jerusalem, Feb. 19, 2006.

Reuters
Ismail Haniyeh i

A Palestinian hugs Ismail Haniyeh, left, a senior Hamas leader nominated as Palestinian prime minister, in his house in Gaza, Feb. 19, 2006. Reuters hide caption

itoggle caption Reuters
Ismail Haniyeh

A Palestinian hugs Ismail Haniyeh, left, a senior Hamas leader nominated as Palestinian prime minister, in his house in Gaza, Feb. 19, 2006.

Reuters

The Islamist Hamas movement nominates Ismail Haniyeh, a prominent Hamas leader, to be the Palestinian prime minister. Israel announces it will immediately stop the transfer of all funds to the Palestinian Authority — about $50 million of taxes and customs revenues that Israel collects each month on behalf of the Palestinian Authority.

In announcing the sanction, acting Israeli Prime Minister Ehud Olmert said Israel has "no intention of harming the humanitarian interests of the Palestinian people."

The Israeli decision is expected to make it more difficult for the Palestinian Authority to pay the monthly salaries of tens of thousands of government officials. Even before the Hamas election victory, officials of the World Bank said that the Palestinian Authority was on the verge of a financial collapse.

Privately, Israeli officials say they are trying to walk a thin line between making the Palestinian people realize they made a mistake by electing a Hamas-led government and causing real harm to the Palestinian people.

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