According to a post by Anadolu English on Friday, September 19, 2025, a new statement by Israeli Finance Minister Bezalel Smotrich has caused controversy once again; in it, he openly declares his intention to cripple the Palestinian Authority (PA) financially.
Smotrich has made it quite apparent that he want to see the PA dismantled and any hope of a Palestinian state thwarted.
Without holding back, the far-right minister threatened to “use all the tools at my disposal” to halt the “danger of a Palestinian state.” His preferred method of achieving this goal was through the use of financial measures, which he dubbed “economic strangulation.”
The accusation that Smotrich made, that the PA exists only to seek the destruction of Israel, caused international observers to reevaluate the conflict and the Palestinians to criticise Smotrich harshly. Stopping the transfer of clearance revenues is one of the main methods that Smotrich has used.
Imports destined for Palestinian markets are subject to these tariffs, which Israel collects on the PA’s behalf. The threat of a Palestinian state, as well as the collapse of the Palestinian Authority, can be averted through economic strangulation, according to Smotrich. He promised to use all available instruments to achieve this goal.
The PA’s financial woes have been exacerbated by the withholding of these monies, which have rendered it unable to reliably pay the wages of its security forces and civil personnel. Severe budget deficits have plagued the PA for months, and Smotrich’s most recent action has made matters worse. Israel has already withheld such funds.
Israeli governments have suspended or reallocated clearance revenues on occasion since 2019, with reasons including security concerns and political differences.
The ongoing interruptions have put the PA in a precarious financial position, making it highly reliant on contributions from outside the country to maintain essential services.
Some see Smotrich’s most recent move as an attempt to undermine the authority’s ability to continue operating. Not only has Smotrich proposed new fiscal policies, but he has also revived demands to annex a large chunk of the West Bank.
There is no way to prevent the establishment of a Palestinian state, he said, “by the application of Israeli sovereignty.” In particular, he advocated for annexing 82% of the occupied land, which, if implemented, would render a two-state solution impossible.
Israel has already been under heavy international criticism for its continuing actions in the West Bank, which include demolishing Palestinian houses, seizing land, and rapidly expanding settlements.
Since formal annexation runs counter to UN resolutions and decades of peace-making diplomacy, it is likely to provoke an even more severe reaction from the international community.
Smotrich’s comments are made during a delicate diplomatic period. During this month’s UN General Assembly meetings, a number of countries are allegedly getting ready to officially recognise the State of Palestine. These countries include Canada, Britain, France, and Australia.
The Israeli government is already under intense pressure to change its stance because 149 out of the 193 member states of the United Nations have recognised Palestine.
Any more recognition by Western nations will just add to this pressure. Meanwhile, Israeli National Security Minister Itamar Ben-Gvir backed Smotrich’s belligerent stance.
In an article published on X, Ben-Gvir referred to the PA as a “terrorist authority” and cautioned that if it was not dismantled, the same errors that, in his opinion, caused the October 7, 2023, Hamas attack would be repeated.
While comparing the PA to the armed groups that have battled against Israel from Gaza, he emphasised that Israel must take serious action.
The catastrophic fallout from that attack, which was led by Hamas, is still very much with us. According to reports, almost 65,200 Palestinians have been killed in Israel’s military operation in Gaza since the onslaught.
The enclave is in ruins, and the population is on the brink of starvation. Millions of people are living day-to-day with food shortages, crumbling infrastructure, and mass displacement, according to humanitarian organisations.
With the PA crippled financially, the risk of its collapse remains large, increasing fears of more instability. International experts fear that if the authority falls apart, the leadership vacuum could lead to disorder, potentially unleashing bloodshed that neither Israel nor the Palestinians can readily restrain. See, More, Here>>>>
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