Israel Nixes Deal for Norway as Intermediary to Transfer Funds to PA

The move comes after Oslo recognized a ‘Palestinian state’ and other anti-Israel actions.

By Joshua Marks, JNS

Jerusalem has decided to cancel an agreement for Oslo to serve as an intermediary to transfer funds earmarked for the Palestinian Authority that were frozen in the wake of the Oct. 7 Hamas-led massacre in the northwestern Negev.

The Israeli Cabinet recently made the decision, which was kept confidential, Ynet reported on Wednesday.

It came in response to Norway’s recognition of a Palestinian state in May and its stance on the current Gaza war, including statements made against Israel by Foreign Minister Espen Barth Eide.

Foreign Minister Israel Katz last month rejected a request from his Norwegian counterpart for an official visit to Israel.

The Scandinavian country on Feb. 18 agreed to serve as an intermediary to transfer funds to Ramallah.

Israel’s Security Cabinet in January approved a decision to freeze funds from reaching the Palestinian Authority that the latter planned to send to the Gaza Strip, where Hamas would seize most of it. Instead, Jerusalem decided to channel the money to a third party, Norway, for safekeeping.

The decision, which enjoys U.S. backing, prevents Gaza-earmarked funds from reaching the P.A. “under any circumstances” unless approved by Israel’s finance minister, the Prime Minister’s Office said in a statement.

Israel’s Finance Ministry collects taxes and customs duties on behalf of the P.A., which it transfers to the entity monthly.

According to the Ynet report, Switzerland is a candidate to replace Norway as the intermediary.