Israel Moves to End Key Banking Waiver

Israel's Finance Minister Bezalel Smotrich has ordered the cancellation of a key waiver that allowed Israeli banks to work with Palestinian banks, potentially paralyzing the Palestinian economy by disrupting access to essential goods, services, and financial transactions. The move comes in retaliation for recent sanctions imposed on Smotrich and another minister by the UK, Canada, New Zealand, and Norway over alleged extremist violence and human rights abuses. Smotrich frames the action as a response to the Palestinian Authority's 'delegitimization campaign' against Israel. The Palestinian banking sector depends heavily on this waiver to process transactions in Israeli shekels, as Palestine lacks a central bank. International figures, including the G7 and US Treasury Secretary Janet Yellen, have warned that ending the arrangement could trigger a humanitarian crisis. The cancellation requires approval from Israel's security cabinet, and it is not yet clear if or when this will happen.