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Occupied Jerusalem: Israel delayed transferring tax funds to the Palestinian government after Prime Minister Salam Fayyad angered Israeli leaders by lobbying the European Union not to upgrade its ties with the Jewish state.
Israel told Fayyad's government the delay in transferring tens of millions of dollars in tax revenues to pay Palestinian National Authority salaries was due to technical problems, Palestinian officials said.
But Israeli officials, speaking on condition of anonymity, said yesterday that withholding the money, at least temporarily, was linked to the EU dispute.
"Their efforts will damage our economy," one of the officials said of Fayyad's lobbying efforts. Israel's Finance Ministry had no immediate comment.
In a letter to the EU dated May 27, Fayyad accuses Israel of "flagrant disregard" of Palestinian rights by continuing to build Jewish colonies and of breaking its commitments to the 27-member European bloc.
'Freeze colonisation'
Fayyad urged the EU not to upgrade its relations with Israel until the Jewish state "abides by international and human rights laws", including freezing colonisation.
Earlier this week, Israel announced plans to build nearly 900 new homes in areas of the occupied West Bank that the Israeli government considers part of occupied Jerusalem, despite US and Palestinian calls to stop colonisation.
A senior Israeli official expressed "deep regret and disappointment" that Fayyad "spent time and energy in order to disturb and damage our bilateral relations with the European Union".
"These deeds and statements create questions regarding the true intentions of the Palestinians to live with us in peace and coexistence," the official said.
Fayyad has also called on the Organisation for Economic Cooperation and Development to deny Israel membership.
EU foreign ministers are scheduled to debate on upgrading ties with Israel at a meeting on June 16.
regularly since talks were formally relaunched at a US conference in November after a seven-year hiatus.
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