Oslo’s Collapse — and the Cost Israel Kept Paying

The pressure on Israel from some parts of the international community to transfer funds to the Palestinian Authority (PA) is growing. Often, these requests are based on claims from the PA that Israel is illegally withholding what they call the “Palestinian tax income.”

Invoking yet another principle of Nazi ideology, on the subject of the taxes Israel collects and transfers to the PA, the PA has been telling the big lie, so often and for so long, that it has almost become a reality. The truth, however, will always trump the baseless propaganda.

Israel’s Collection and Transfer of Taxes to the PA In a Nutshell

As part of the Oslo Accords, Israel agreed to pursue peace and coexistence with the Palestine Liberation Organization (PLO). The PLO promised to end terrorism and “armed struggle” against Israel, prevent incitement to violence, actively combat terrorism, and avoid unilateral actions. In exchange, Israel waived its right to collect taxes directly from the Palestinian territories, instead collecting and transferring those funds to the Palestinian Authority (PA), the self-governance body created under the Oslo Accords.¹ The core concept was mutual commitment: the PLO-PA would deliver peace and coexistence, while Israel would provide financial support.

The PLO-PA Breached Every Commitment

The PLO and the PA never fulfilled their commitments. The PLO, dominated by Fatah, the party of Yasser Arafat and Mahmoud Abbas, never truly abandoned terror. Fatah leaders have repeatedly stressed this reality. The PLO membership still includes internationally designated terror organizations such as the Popular Front for the Liberation of Palestine (PFLP), which never accepted the Oslo Accords.

The PA education system has been consistently criticized for radicalization, antisemitism, and the promotion of violence against Israel and Israelis.

Instead of combating terror, the Palestinian leadership refers to the genocidal terrorists of Hamas, who planned and executed the October 7, 2023, massacre, as legitimate “Palestinian factions.”

Incitement to violence, terror, and murder, as well as the glorification of terrorist murderers, led by the PA, remain commonplace. To ensure that Palestinians not only hear and see the incitement, the PLO-PA also developed, implemented, and even partially entrenched in law, a multi-billion dollar “Pay-for-Slay” terror reward policy.

In the international arena, the PLO-PA repeatedly acted unilaterally, requesting that the United Nations recognize the “State of Palestine.” Having received the political status of “non-member observer state” – a status held only by the Holy See and the non-existent “State of Palestine” – the PLO-PA then joined the International Criminal Court (ICC), in order to corrupt it and abuse it as another political avenue to hound Israel.

The Absurdity of the Israeli Tax Transfers

While the PLO-PA did not fulfill most Oslo commitments, Israel continued to collect and transfer taxes. Because the PLO-PA collected only basic domestic taxes, Israel accounted for about 65-70% of the PA’s total budget, according to several estimates.

In other words, for every NIS 100 the PLO-PA spent, Israel provided the PA with NIS 65-70 for the following:

• Educating Palestinians to hate Israel, seek its demise, and to murder Israelis
• Various activities involving support for groups like Hamas
• Inciting violence, terror, and murder and glorifying terrorists
• The terror-rewarding “Pay-for-Slay” policy. Shamefully, Israel was literally helping the PLO-PA to reward the terrorists who murdered Israelis
• Diplomatic efforts, such as seeking recognition of a “State of Palestine”
• Promoting procedures against Israel, its leaders, and its soldiers in the ICC

By continuing to transfer the funds to the PA, Israel was bankrolling its own potential demise.

Indeed, with very few exceptions, since the system was developed and certainly for the last 20 years, for which there are records, Israel has continued to transfer the funds to the PA. On occasions, to ostensibly flex its muscles, the PLO-PA even refused to accept the taxes, driving itself into a self-imposed financial crisis.

Simultaneously, the PLO-PA continued to complain to the international community about its financial difficulties and to request assistance.

In June 2025, Israel ceased transferring the taxes to the PLO-PA.

Western Hypocrisy

Despite the fact that the PLO-PA breached every commitment made in the Oslo Accords, many Western countries, including, among others, the UK, France, the entire European Union, and Canada, chose to ignore the reality and focus their criticism on Israel alone.

While acknowledging that the PLO-PA spent billions of dollars rewarding terrorists, these countries did almost nothing. To protect themselves against claims of terror financing, various countries refused to fund the PLO-PA’s general budget, which was used to pay terror rewards, preferring to fund only specific projects or issues.

In an act of unprecedented hypocrisy, in June 2025, the United Kingdom, Canada, New Zealand, Norway, and Australia decided to impose personal sanctions on two ministers in the Israeli government, Itamar Ben-Gvir and Bezalel Smotrich, citing incitement of “extremist violence and serious abuses of Palestinian human rights” as the basis for their decision.

Questions remain about the extent to which ministers Ben-Gvir and Smotrich were responsible for the acts cited in the sanctions. Even assuming responsibility, many see the decision as reflecting a double standard.

Despite the clear reality, the countries that sanctioned ministers Ben-Gvir and Smotrich have never sanctioned officials in the PLO-PA.

While the PLO-PA’s “Pay-for-Slay” policy is the legacy of Palestinian leader Mahmoud Abbas, he was never sanctioned. Abbas was not even sanctioned for his rabid Jew-hatred when he called on Palestinians to prevent Jews from defiling the Temple Mount with their “filthy feet.” While PLO-PA leaders such as Jibril Rajoub incited terror and openly called for the murder of Jews, he was never sanctioned. No Palestinian leader was ever sanctioned for the radicalization of the PA education curriculum or for the glorification of terrorist murderers. No PLO leader was ever sanctioned for membership in the PLO by internationally designated terrorist organizations.

The Path Forward

The taxes that Israel collects and transfers to the PA are not “Palestinian taxes.” They are taxes that Israel is fully entitled to collect, but that Israel waived in favor of the PLO-PA. The waiver was not devoid of context. Rather, it had a very specific bilateral context – the Oslo Accords.

Since the PLO-PA has fundamentally breached every provision of the accords, Israel is fully within its rights to refuse to continue transferring the funds. Moreover, there is no reason whatsoever why Israel should be expected to continue funding every nefarious PLO-PA action.

If the countries pressuring Israel to renew the Israeli transfer of funds to the PA are serious, the following are six elementary steps the PLO-PA should first meet:

1. The PLO-PA stops all forms of incitement, in schools, on TV, in the press, on social media, and every other forum.
2. The PLO-PA must eradicate all forms of terror glorification. Included in this, the names of PA schools named after mass murderers of Israelis and Nazi supporters must be immediately changed.
3. The PLO-PA must immediately designate Hamas, Palestinian Islamic Jihad, and the PFLP as terrorist organizations and act to immediately arrest, prosecute, and punish their members.
4. The PLO-PA must immediately and completely abandon its terror-rewarding “Pay-for-Slay” policy. The total eradication of the policy must be authentic and verified, not just as a weak PR stunt, as Abbas did in February 2025.
5. The PLO-PA must notify the UN that it no longer seeks recognition of the non-existent “State of Palestine,” and that any expression of such recognition should be seen as null and void.
6. The PLO-PA must notify the ICC, since the “State of Palestine” does not actually exist; it is rescinding its request to be a member of the court, effective immediately.

In addition, the countries who decided to impose sanctions on ministers Ben-Gvir and Smotrich should immediately cancel those decisions, or alternatively impose similar sanctions on every PLO-PA official involved in the “Pay-for-Slay” policy, starting with Abbas, and continuing, at the very least, to the PA Prime Minister, the PA minister of Finance, the heads of the PLO organizations that deal with the so-called martyrs, prisoners and released prisoners, and all their administrative staffers.

The above steps are not “new demands.” Rather, they reflect the commitments the PLO accepted, and in return for which, Israel agreed to provide funds. If the PLO-PA does not fulfill its commitments, there is no reason whatsoever why Israel should be expected to continue funding the Palestinian terror, whether the physical murder of Jews or the diplomatic terror in the international forums.      

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Notes