Palestinian officials said Friday that Israel is forcing banks in the West Bank to close accounts held by the families of security prisoners in Israeli jails to prevent the Palestinian Authority from providing stipends to them.
The Palestinian Authority's "pay-for-slay" policy of paying salaries to terrorists imprisoned in Israel and the families of dead terrorists amounts to hundreds of millions of dollars a year.
Israel has long objected to this scheme, saying it rewards terrorism. The Palestinians view the payments as a social safety net for those living under decades of military occupation.
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The apparent move to target banks comes as the Palestinians face a potentially severe economic crisis after weeks of lockdown to combat the coronavirus pandemic. It also comes as Israel vows to annex large parts of the West Bank in line with President Donald Trump's Middle East plan.
Protesters shattered the windows of several bank branches and set fires outside some of them late Thursday and early Friday as word of the new regulations spread.
Qadora Fares, head of the Palestinian Prisoners' Association, said relatives of current and former prisoners have told him they were forced to close their accounts because of a new Israeli law penalizing banks for facilitating the payments.
The father of one prisoner said that he tried to use an ATM on Thursday but the request was declined. He says the bank told him to withdraw his funds and close the account because of the new Israeli regulations. He spoke on condition of anonymity out of fear Israel would target his assets.
A bank manager said the Office of the Coordinator of Government Activities in the Territories, the Israeli military body that oversees civilian affairs in the Palestinian territories, warned banks of the move months ago, saying it would go into effect Sunday. He said the banks are complying because they fear legal action or Israeli raids.
The Israeli Defense Ministry and COGAT did not immediately respond to requests for comment.
Fares said the families of around 12,000 current and former prisoners receive monthly allowances from the Palestinian Authority. Prisoners who have served more than five years get around $700 a month until they find employment, and families receive aid according to how many children they have, he said.
He said the new regulation was a "blatant violation" of Palestinian sovereignty since the banks are located in areas governed by the Palestinian Authority. The Israeli military regularly carries out arrest raids and other operations in those areas.
Palestinian Prime Minister Mohammad Shtayyeh issued a statement saying he has formed a committee to "to study the Israeli threats against banks that provide services to families of prisoners and martyrs."
Hussein al-Sheikh, an aide to Palestinian President Mahmoud Abbas, rejected the closing of the accounts, calling it an affront to the "dignity of every Palestinian" and a "submission to the will of the occupation."
"We hope to create a Palestinian national consensus in protecting our families & their rights & preserving their dignity," he tweeted.
The payments are dispensed by the so-called "Martyrs' Fund," which also provides aid to the families of suicide bombers and other terrorists. Abbas has consistently rejected violence in favor of peace talks with Israel, but the negotiations stalled out more than a decade ago. He has repeatedly vowed to continue the payments despite Israeli pressure.
Over the last two years, Israel has deducted the amount of the payments from tax revenues it collects on behalf of the Palestinian Authority. Last year, the Palestinian Authority rejected all the tax transfers in protest, but it relented months later.
The Palestinian Authority imposed heavy coronavirus restrictions in mid-March, closing nonessential businesses in the parts of the West Bank where it enjoys limited autonomy and banning most travel between towns and villages.
Those measures appear to have succeeded in containing the outbreak, with Palestinian authorities reporting around 540 cases and only two fatalities. But the lockdown is expected to impose heavy economic costs on the territory and the cash-strapped Palestinian Authority.
