JERUSALEM: Israel canceled a waiver on Tuesday that had allowed Israeli banks to work with Palestinian ones, threatening to paralyze Palestinian financial institutions, Israel’s finance ministry said in a statement.
“Against the backdrop of the Palestinian Authority’s delegitimization campaign against the State of Israel internationally, Finance Minister Bezalel Smotrich has instructed Accountant General CPA Yahli Rotenberg to cancel the indemnity provided to correspondent banks dealing with banks operating in Palestinian Authority territories,” the ministry said.
Smotrich had threatened in May 2024 to cut the vital connection between Israel and Palestinian banks in the occupied West Bank in retaliation for the recognition of the State of Palestine by three European countries.
The Palestinian financial and banking system is dependent on the regular renewal of the Israeli waiver.
It protects Israeli banks from potential legal action relating to transactions with their Palestinian counterparts, for instance in relation to financing terror.
In July, G7 countries urged Israel to “take necessary action” to ensure the continuity of Palestinian financial systems.
It came after US Treasury Secretary Janet Yellen warned that “to cut Palestinian banks from Israeli counterparts would create a humanitarian crisis.”
The overwhelming majority of exchanges in the West Bank are in shekels, Israel’s national currency, because the Palestinian Authority does not have a central bank that would allow it to print its own currency.
 

JERUSALEM: Israeli Prime Minister Benjamin Netanyahu said on Tuesday that there had been “significant progress” in efforts to secure the release of the remaining hostages in Gaza, but that it was “too soon” to raise hopes that a deal would be reached.

Despite efforts by the United States, Egypt and Qatar to restore a ceasefire in Gaza, neither Israel nor Hamas has shown willingness to back down on core demands, with each side blaming the other for the failure to reach a deal.
Netanyahu, who has come under pressure from within his right-wing coalition to continue the war and block humanitarian aid from entering Gaza, said in a video statement shared by his office that there had been progress, without providing details.
A source familiar with the negotiations said that Washington had been giving Hamas more assurances, in the form of steps that would lead to an end to the war, but said it was US officials who were optimistic, not Israeli ones. The source said there was pressure from Washington to have a deal done as soon as possible.
“There is a deal on the table. Hamas must stop acting recklessly and accept it,” a State Department official said when asked whether the US agreed with Netanyahu’s statement on the progress in talks.
“President Trump has made clear the consequences Hamas will face if it continues to hold the hostages, including the bodies of two Americans,” the official added, speaking on condition of anonymity.
Two Hamas sources told Reuters they had no knowledge of any new ceasefire offers.