Israel’s Security Cabinet on Thursday night extended a waiver allowing Israeli banks to cooperate with Palestinian ones for another year.
The waiver allows Israeli banks to process shekel payments for services and salaries associated with the Palestinian Authority without running afoul of laws against terror-funding and money laundering. Palestinian banks process PA stipends for imprisoned terrorists and their families.
Israel came under heavy US and European pressure as diplomats argued that without the waiver, the Palestinian Authority economy would collapse. An opinion presented by Israel’s National Security Council said that severing banking ties with the PA would have “significant negative consequences” for Israel’s security and foreign relations, warning such a move would increase Palestinian terror financing and money laundering.
The nw waiver expires at the end of November 2025.