By Steven Scheer

JERUSALEM (Reuters) -Israel plans to use tax revenue it collects on behalf of the Palestinian Authority to pay the PA’s nearly 2 billion ($544 million) debt to state-run Israel Electric Co (IEC), Finance Minister Bezalel Smotrich said on Sunday.

Israel collects tax on goods that pass through Israel into the occupied West Bank on behalf of the PA and transfers the revenue to Ramallah under a longstanding arrangement between the two sides.

Since the Hamas-led attack on Israel on Oct. 7, 2023, triggered the war in Gaza, Smotrich has withheld sums totalling 800 million shekels earmarked for administration expenses in Gaza.

Those frozen funds are held in Norway and, he said at Sunday’s cabinet meeting, would instead be used to pay debt owed to the IEC of 1.9 billion shekels.

“The procedure was implemented after several anti-Israeli actions and included Norway’s unilateral recognition of a Palestinian state,” Smotrich told cabinet ministers.

“The PA’s debt to IEC resulted in high loans and interest rates, as well as damage to IEC’s credit, which were ultimately rolled over to the citizens of Israel.”

The Palestinian Finance Ministry said it had agreed for Norway to release a portion of funds from an account held since last January with 1.5 billion shekels, calling money in the account “a punitive measure linked to the government’s financial support for Gaza”.

The ministry said as part of the deal, 767 million shekels of the Norwegian-held funds will pay Israeli fuel companies for weekly fuel purchases over the coming months. A similar amount will be used to settle electricity-related debts owed by Palestinian distribution companies to IEC.

Smotrich has been opposed to sending funds to the PA, which uses the money to pay public sector wages. He accuses the PA of supporting the Oct. 7 attack in Israel led by the Islamist movement Hamas, which controlled Gaza. The PA is currently paying 50-60% of salaries.

Israel also deducts funds equal to the total amount of so-called martyr payments, which the PA pays to families of militants and civilians killed or imprisoned by Israeli authorities.

The Palestinian finance ministry said 2.1 billion shekels remain withheld by Israel, bringing the total withheld funds to over 3.6 billion shekels as of 2024.

Israel, it said, began deducting an average of 275 million shekels monthly from its tax revenues in October 2023, equivalent to the government’s monthly allocations for Gaza.

“This has exacerbated the financial crisis, as the government continues to transfer these allocations directly to the accounts of public servants in Gaza,” the ministry said.

It added it was working with international partners to secure the release of these funds as soon as possible.

($1 = 3.6763 shekels)

BUCHAREST (Reuters) – Tens of thousands of Romanians angered by the cancellation of a presidential election marched through Bucharest on Sunday to demand that the ballot should go ahead and that outgoing centrist President Klaus Iohannis should resign.

In a move that polarised voters, Romania’s top court voided the presidential election on Dec. 6, two days before the second round.

The cancellation came after state documents showed frontrunner Calin Georgescu, a critic of NATO, had benefited from an unfair social media campaign likely to have been orchestrated by Russia, accusations Moscow has denied.

The court ordered that the election be re-run in its entirety. The pro-European coalition government has yet to approve a calendar for the election, although party leaders agreed to hold the two rounds on May 4 and May 18.

Iohannis, whose term expired on Dec. 21, will stay on until his successor is elected.

On Sunday, tens of thousands of protesters, including left-wingers and those angered by the way the way the election was cancelled, joined the protest organised by the opposition hard-right Alliance for Uniting Romanians (AUR), Romania’s second-largest party.

“We ask for a return to democracy by resuming the election with the second round,” AUR leader George Simion told reporters.

Organizers said 100,000 people were at the protest, but riot police along the march estimated the numbers at around 20,000. Protesters waved flags and shouted “Freedom” and “Bring back the second round.”

“Our right to vote was broken,” said Bogdan Danila, a 43-year-old truck driver. “In addition, Iohannis was in power for ten years and did nothing for the people, while parties betrayed us, they are all corrupt. We want something else.”

Some protesters carried portraits of Georgescu or Christian Orthodox icons while street vendors sold flags and vuvuzelas.

“Authorities must say why they cancelled the election, we want to see the evidence,” said Cornelia, 57, an economist wrapped in a Romanian flag who declined to give her last name.

“At this rate we won’t be voting anymore, they will impose a leader like in the old days.”

It remains unclear whether Georgescu, who opposes Romanian support for Ukraine against Russia’s invasion, will be allowed to run for president again.