Israeli Finance Minister Smotrich freezes funds for Palestinian citizens of Israel, East Jerusalem

MEE Staff

Middle East Eye  /  August 8, 2023

Far-right Finance Minister Bezalel Smotrich also holds up educational grants for Palestinians.

Israel has frozen funds for Palestinian towns and Palestinian education programs in East Jerusalem, far-right Finance Minister Bezalel Smotrich said on Monday, leading to charges of racism by opponents.

“The priorities of our national government… are different from those of the previous leftist government and we should not apologize for that,” Smotrich said, saying the funds would have eventually gone to “criminals and terrorists”.

Smotrich, who also took administrative control of large sections of the occupied West Bank from Israel’s military, in a move experts say amounts to “de jure annexation”, is refusing to release about  $85.5m in funds previously earmarked for Palestinian municipalities.

He is also holding up about $53m slated for education preparatory programs for young Palestinians, claiming that “Islamic radical cells” had taken root in Israeli colleges and universities.

Smotrich is one of the most far-right ministers in Israel’s government. The leader of the Religious Zionism political alliance previously said that “there were no such thing as Palestinian people”.

He also said that the Palestinian town of Huwara, in the occupied West Bank, should be “wiped out”, following the killing of two Israeli settlers in February.

Palestinian citizens of Israel under threat

Palestinian citizens of Israel are estimated to make up about 20 percent of the Israeli population. They were granted citizenship in 1948, when the state of Israel was proclaimed, but they have long faced discrimination, racism, and economic disenfranchisement. Palestinians refer to the creation of Israel as the Nakba or catastrophe, which refers to the ethnic cleansing of Palestine by Zionist militias to make way for the creation of Israel

Newly-unearthed Israeli historical records reveal officials’ relentless efforts to forcibly empty Palestinian lands of their Bedouin inhabitants in the Negev during the 1950s. Additionally, the Israeli government has been accused of preventing the expansion of Palestinian villages and encircling them with new illegal Israeli settlements.

Smotrich’s funding freeze underscores how Palestinian citizens of Israel have come under increased threat and harassment under a far-right government led by Israeli Prime Minister Benjamin Netanyahu.

In June, Middle East Eye reported that the Israeli government was advancing legislation to “Judaize” the Galilee, a region in northern Israel with a significant Palestinian population, as part of a deal struck by Smotrich and National Security Minister Itamar Ben-Gvir, who want to expand Israeli settlements in the region.

Smotrich’s move is also likely to put new economic pressure on Palestinians in East Jerusalem, who comprise nearly 40 percent of the city’s total population.

Activists and some Israeli politicians have accused Netanyahu’s government of willfully ignoring the plight of Palestinian citizens of Israel. Between January and June 2023, 102 Palestinian citizens were murdered in several locations across Israel, including women and small children, with little interference by the Israeli police.

Palestinian citizens of Israel have told MEE previously that despite a surge in protests against Netanyahu’s judicial overhaul efforts, the Israeli public has little interest in the needs of Palestinian citizens of Israel or the occupation of Palestinian territories.

Meanwhile, Netanyahu’s government has plowed ahead with an unprecedented level of construction of illegal settlements in the occupied West Bank while violence against Palestinians is flaring.

According to a MEE tally, at least 208 Palestinians have been killed by Israeli fire this year, including 36 children – a rate of nearly one fatality per day.

A total of 172 people have died in the West Bank and East Jerusalem, making 2023 one of the bloodiest years in the occupied Palestinian territories. Another 36 people were killed in the Gaza Strip.

Meanwhile, Palestinians have killed 26 Israelis in the same period, including six children.


Israeli finance minister suspends funds to Palestinian towns, East Jerusalem

Henriette Chacar & Maayan Lubell

Reuters  /  August 8, 2023

JERUSALEM – Israeli Finance Minister Bezalel Smotrich has frozen funds for Palestinian towns and Palestinian education programs in East Jerusalem, citing crime and safety fears and prompting accusations of racism.

Smotrich, a key member of Prime Minister Benjamin Netanyahu’s nationalist-religious government, said on Monday some of the budget funds meant for Palestinian local councils were a political pay-off by the previous cabinet that could end up in the hands of “criminals and terrorists”.

“The priorities of our national government… are different from those of the previous leftist government and we should not apologize for that,” said Smotrich, head of the pro-settler Religious Zionism party whose past comments about the Palestinians have drawn international condemnation.

Israel’s public broadcaster Kan first reported the freeze on Sunday when it published a letter from Interior Minister Moshe Arbel to Smotrich, urging him to release 200 million shekels ($54 million) of the funds at stake that are intended for administration and another 100 million for economic development.

Lawmaker Mansour Abbas who heads the United Arab List accused Smotrich of racism.

“Arab [Palestinian] citizens are entitled to those funds, which were meant to close the gaps between Arab [Palestinian] and Jewish communities,” he told Reuters.

Palestinian citizens, most of whom are descendants of Palestinians who stayed in the new Israeli state after the 1948 war surrounding its creation, make up about a fifth of Israel’s population.

Netanyahu’s office did not respond to a request for comment, while opposition leader and former prime minister Yair Lapid also accused Smotrich of racism, “abusing Arab [Palestinian] citizens simply because they are Arab [Palestinian]”.

Israel’s Palestinian minority has for decades faced social and economic disparities compared with Jewish citizens, including high poverty rates, overcrowded towns lacking in infrastructure and poorly-funded schools.

The extra funds, designated in 2022 for 67 Palestinian councils, were the state’s acknowledgement of years of insufficient resource allocation to Palestinian localities, said Ameer Bisharat, head of the National Committee of Arab Local Councils in Israel.

The freeze could mean that councils are unable to provide basic services such as garbage collection or reopening schools after the summer holiday, he said.


Smotrich said a separate 200 million shekels for encouraging academic studies among Palestinians from East Jerusalem would also be frozen until what he described as “extremist Islamic activity” on campus was eradicated.

In May, the government extended a 2018 2.1 billion shekel five-year plan meant to improve education, employment, health and infrastructure in East Jerusalem, which Israel captured in a 1967 war and annexed in a move unrecognized internationally.

It includes programs to help Palestinians – who make up almost 40% of Jerusalem’s population, with almost two thirds below the poverty line – integrate into Israeli academic institutions.

Smotrich said the new East Jerusalem plan would have a total increased budget but that although encouraging academic studies among the city’s Palestinians was a worthy cause, this also had unwelcome consequences.

“In recent years, radical Islamic cells have developed in Israeli universities and colleges, over and over again they express solidarity with Israel’s enemies,” he said on Facebook, responding to Kan’s report.

It was unclear on what data or research Smotrich had based his radicalization claim, though he cited pro-Palestinian student protests during the 2021 Israel-Gaza war. The academic institutions involved rejected his claim.

The Hebrew University of Jerusalem, along with three other institutions, expressed shock at Smotrich’s funding decision, which will affect hundreds of Palestinian students, and urged Netanyahu not to let “voices that promote hatred and racism” prevail.

Security chiefs have made clear that Smotrich’s decision will be counterproductive, the university added.

Reporting by Henriette Chacar and Maayan Lubell; editing by James Mackenzie and Gareth Jones