US Treasury Secretary: Israel's Threat to Cut Ties with Palestinian Banks is Worrisome

The US Treasury Secretary expressed concern over Israel's threat to sever ties between Palestinian banks and Israeli banks, emphasizing that such an action would close a vital pathway for the Palestinian economy. Janet Yellen stated this during a press conference ahead of the G7 finance ministers' meeting, asserting that the US and its partners must 'do everything possible' to increase humanitarian aid to Palestinians in Gaza, reduce violence, and create economic stability in the West Bank. She mentioned that she would raise this issue at the G7 summit in a resort town in northern Italy and expected other countries to also express concern about the impact of such a move on the West Bank's economy. The Israeli Finance Minister stated that he cannot extend the exemption that expires on July 1, which allows Israeli banks to process payments related to the Palestinian Authority. Bezalel Smotrich responded on social media, stating he cannot extend the exemption because Palestinians still financially support 'terrorism,' and Israeli banks could face legal challenges for violating anti-terrorism financial laws. On the other hand, the Palestinian Monetary Authority (PMA) issued a statement saying this decision would harm the economies of both Palestinians and Israelis. According to the US Treasury Secretary, existing banking channels are crucial for processing transactions that enable approximately $8 billion in annual imports of electricity, water, fuel, and food from Israel, as well as $2 billion in annual exports that the livelihoods of Palestinians depend on. Participants at the World Economic Forum discussed the Iranian government, Israel, and the situation in Gaza and Rafah.