The government is currently in talks with the Palestinian Authority to transfer hundreds of millions of shekels to Ramallah, which is facing a major financial crisis, Israeli media reported over the weekend.
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A deal, worth 800 million shekels ($248.5 million) to the Palestinian Authority, has already been formulated, an Israeli official said on Friday.
Another official familiar with the matter said the deal was "practically done."
Senior PA official Ahmad Majdalani told The Times of Israel that discussions over financial support were ongoing between the two sides. He said the funds would not be loaned, but rather an advance on the tax revenue that Israel pays to the PA.
"There are discussions around an advance on what is owed to us and not a loan," said Majdalani.
The West Bank is experiencing a dire financial crisis due in particular to the coronavirus pandemic. The Palestinian economy has contracted by more than 11% this year.
News of the planned transfer of funds come against the backdrop of a Palestinian statement saying that the PA will not resume peace talks with Israel under the aegis of the United States as the sole mediator.
Ramallah first rejected Washington mediation when former US President Donald Trump took office, saying he was grossly biased against the Palestinians. Since taking office in January, US President Joe Biden has relaxed some of the restrictions imposed on the PA by the Trump administration, so the nature of the Palestinians' refusal is unclear.
Azzam al-Ahmad, a member of the executive committee of Palestine Liberation Organization, told reporters that the Palestinians "will not accept a situation where the US alone is in charge of the peace process in the Middle East."
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Al-Ahmad said that another option Ramallah rejected out of hand was a "management" of the conflict that would essentially preserve the status quo.
He further told the Indo-Asian News Service that the Palestinian leadership "needs to coordinate its political positions with the Egyptian and Jordanian sides as well as with other Arab and Islamic states on establishing an independent Palestinians state with East Jerusalem as its capital."
i24NEWS contributed to this report.
