Finance Minister Bezalel Smotrich has dramatically escalated tensions with Britain, threatening to immediately cease tax revenue transfers to the Palestinian Authority and terminate legal-economic protections for Israeli banks if the UK implements planned sanctions targeting Israeli cabinet ministers.
The confrontation intensified Monday following reports that Britain would impose formal sanctions on Smotrich and National Security Minister Itamar Ben Gvir over their Gaza-related statements, as reported by The London Times. The move represents an unprecedented step in Israel-Britain diplomatic relations, marking the first instance of the UK targeting senior Israeli government officials with such measures.
Under the planned sanctions, Britain would align with Canada, Australia, New Zealand, and Norway in freezing assets belonging to Ben Gvir and Smotrich while implementing travel restrictions against both ministers for what officials describe as "inciting violence against Palestinians." The sanctions mirror those typically imposed on Russian officials connected to the Ukraine conflict, prohibiting entry to Britain and barring British financial institutions from conducting business with the targeted individuals.
British Foreign Secretary David Lammy had previously indicated his government's willingness to pursue sanctions against the ministers, characterizing their statements as "monstrous." According to the report, Ben Gvir was quoted advocating for encouraging "voluntary emigration of Gaza residents" while asserting that "there is no need to bring aid into Gaza, they have enough."
Speaking to the British Parliament, Lammy declared that "we have entered a dark phase in this conflict," accusing Prime Minister Benjamin Netanyahu's government of planning to "expel Gazans from their homes and allow them only a small portion of the aid they need." He specifically referenced Smotrich's remarks about Israeli forces that would "cleanse" Gaza, destroy remaining infrastructure, and relocate Palestinians to other countries.
Responding to the sanctions threat during an event in Hebron, Smotrich directly challenged Britain's motivations. "They decided to impose sanctions on me because I am preventing the establishment of a Palestinian state," he declared. "The natural response will also be practical, but the verbal response is contempt for the White Paper. Britain already tried once to prevent us from settling the cradle of our homeland, and will not be allowed to do it again. We are determined to continue building."
Sources within Smotrich's circle confirmed to Israel Hayom that the minister possesses the necessary authority to execute his threatened economic measures. These would encompass immediately terminating tax revenue transfers that Israel collects for the Palestinian Authority and dismantling legal-economic frameworks that currently protect Israeli banks maintaining relationships with Palestinian financial institutions.
The threatened actions could severely impact Palestinian economic stability, as Israel serves as the primary collector of customs and tax revenues on behalf of the Palestinian Authority under existing agreements.
