Report: America is considering strengthening its relations with the Palestinian Authority

Translation SadaNews: The United States is currently in talks with the Palestinian Authority aimed at strengthening the bilateral relations that have experienced tensions in the recent period, at a time when Washington seeks to gain the Palestinian Authority's cooperation to advance its significant political initiatives in the region, according to three government officials familiar with the matter, who spoke to the "Times of Israel".

The administration of President Donald Trump aims to transfer billions of dollars in revenues of the Palestinian Authority, currently withheld by Israel, to the underfunded Peace Council, which was established by Washington to implement its 20-point plan to end the war in Gaza and rebuild the sector. This plan stipulates that the Palestinian Authority will assume control of the Gaza Strip after implementing comprehensive reforms, according to the Hebrew report.

The "Times of Israel" quoted a Palestinian Authority official stating that Saudi Arabia is assisting Ramallah in the reform process, which Riyadh considers essential to establish a path for the establishment of a Palestinian state.

The Trump administration has embraced the Saudi efforts, considering them complementary to its endeavors to expand the Abraham Accords. An American official reported that Riyadh expressed its readiness to normalize relations with Israel if a "irreversible path" towards the establishment of a Palestinian state is paved.

In this context, the United States has engaged in discussions with the Palestinian Authority for several months, which Ramallah hopes will lead to "normalizing" its strained relationship with the Trump administration, according to a Middle Eastern intelligence official, who claimed that Washington had largely neglected the Palestinian Authority as it tends to view the Palestinian issue with a focus on Gaza, leaving the West Bank as a secondary matter. This was translated by SadaNews from the "Times of Israel".

A memorandum of understanding has been discussed, in which both parties commit again to Trump's 20-point plan, particularly the last two points which include the right of Palestinians to self-determination and the launch of US-led peace talks between Israel and the Palestinians, as soon as the redevelopment of Gaza and the reform of the Palestinian Authority progress.

The three officials indicated that the memorandum of understanding will also see the Palestinian Authority committing to certain standards for reforms of social welfare and educational systems supervised by Saudi Arabia, along with a plan to combat incitement. According to the Hebrew report.

The Hebrew newspaper's report continued: "This will include the US declaring its readiness to lift the sanctions imposed on the Palestinian Authority once the reforms are completed in a verifiable manner, and Ramallah hopes that the memorandum of understanding will include a reference to the potential reopening of the diplomatic mission of the Palestine Liberation Organization in Washington, according to the Palestinian official".

Trump effectively closed the Palestinian embassy in Washington, D.C. during his first term due to the Palestinian Authority’s refusal to cooperate with the US peace initiative, which the Authority considered heavily biased in favor of Israel.

A Middle Eastern intelligence official told the Hebrew newspaper that the US is considering reviving the 2020 peace plan after the Israeli elections in the fall, hoping that the diminished position of the Palestinian Authority will force it to reconsider the proposal.

Meanwhile, the United States seeks a Palestinian commitment to halt efforts to internationalize the conflict against Israel and withdraw lawsuits filed against Tel Aviv in international legal forums, the American official said, adding that the Palestinian Authority, in turn, requested the inclusion of a clause in the memorandum of understanding regarding the cessation of Israeli settlement expansion and curtailing rampant settler violence in the West Bank.

According to the report from the Hebrew newspaper: "Deputy Hussein al-Sheikh led the talks on behalf of the Palestinian Authority, while the Trump administration was represented by Aryeh Lightstone and Scott Laitsch, two senior officials at the US State Department, with periodic participation from Jared Kushner, the president's senior envoy and son-in-law. Also involved in the talks, though indirectly, was former British Prime Minister Tony Blair, who led the Peace Council's efforts to engage with the Palestinians, alongside Saudi official Manal Radwan, who contributed to shaping Riyadh's policy on the Palestinian issue".

The Hebrew newspaper said as translated by SadaNews: "However, negotiations slowed in recent days, as American officials expressed reluctance to sign an official agreement such as a memorandum of understanding. Instead, they proposed the idea of exchanging letters between al-Sheikh and US Secretary of State Marco Rubio addressing some of the aforementioned points, though not jointly, according to what a Middle Eastern intelligence official mentioned".

A Palestinian Authority official speculated that the hesitation in Washington relates to Tel Aviv's reactions to the US strengthening its relationship with the Palestinian Authority.

Israel insists that the Palestinian Authority has not made real reforms, particularly regarding its social welfare program, which included financial payments to Palestinian prisoners held by Israel on charges related to carrying out attacks, based on their detention duration, as well as to the families of martyrs.

The report continues: "The Palestinian Authority announced the cancellation of that controversial program in February 2025 and implemented a new system that strictly conditions all payments based on the financial situation of the beneficiary, in line with other social welfare programs abroad".

However, a report from the US State Department to Congress in April concluded that the Palestinian Authority continues to "provide a compensation system to support terrorism through new mechanisms and under a different name." According to the Times of Israel.

"The report relied exclusively on open-source information from the Israeli government and several other groups that have long criticized the Palestinian Authority, while initial results from an external audit of Palestinian Authority bodies involved in the new social welfare program indicated that reform is being implemented correctly to ensure that beneficiaries do not receive assistance based on whether a relative carried out an attack against Israel," two Western diplomats familiar with the auditing process stated to the Times of Israel last week. According to it.

The newspaper states: "But this decision may not be sufficient anymore, as Israeli officials now argue that no family of prisoners or martyrs should be allowed to receive salaries from the Palestinian Authority, even if they meet the criteria of being poor enough to receive social welfare."

A Palestinian Authority official expressed concern that Jerusalem is trying to convince the Trump administration to adopt its position after both the US and Israel agreed during the Biden administration to accept social welfare payments for anyone deemed poor enough.

A Middle Eastern intelligence official confirmed that among the factors complicating the talks between the US and the Palestinian Authority are certain elements in the Trump administration, particularly in the State Department, who prefer the collapse of the Palestinian Authority over its reform.

The American official insisted that Washington recognizes the importance of the Palestinian Authority, pointing to Ramallah's support for the UN Security Council resolution issued in November endorsing Trump's 20-point plan, which was crucial for its accomplishment.

Nevertheless, the American official did not deny the lack of enthusiasm within the administration to strengthen relations with the Palestinians, as political focus and capital are being spent elsewhere in the region.

However, as Trump appeared to turn against Prime Minister Benjamin Netanyahu in recent weeks due to the war with Iran and Israel's conflict with the Lebanese Hezbollah, a Palestinian Authority official speculated whether such tension in US-Israeli relations could serve the interests of the Palestinian Authority.

The official recalled how Trump attacked Netanyahu - after leaving office in 2021 - and affirmed that Palestinian Authority President Mahmoud Abbas was more interested in peace than the Israeli prime minister.

Smotrich obstructs the disbursement of funds to the Peace Council

The three officials told the Hebrew newspaper that the United States also hopes to use the talks with the Palestinian Authority to gain its approval to transfer a large portion of the over $5 billion in Palestinian tax revenues that Israel withholds to the National Committee for the Management of Gaza, an entity of Palestinian technocrats supervised by the Peace Council and tasked with replacing Hamas's rule in Gaza until the Palestinian Authority completes the reform process.

Both parties exchanged views on the amount of funds to be transferred to the council for the people's alliance and the amount to be sent to the Palestinian Authority.

The report indicated that this came "after the Authority initially expressed discontent with the idea of sending its much-needed funds to a potential competing ruling entity, it agreed to join, considering that receiving any part of the funds is better than nothing, given its dire financial situation".

However, the Palestinian Authority requested that the US reaffirm its commitment to using a formal communication channel established in February to keep the Authority involved in the decision-making process in Gaza.

The newspaper continues: "Tax revenues constitute the bulk of the Palestinian Authority’s budget, and Israel has refused to transfer any of this money for over a year, in violation of the Oslo agreements. Israel previously deducted amounts equivalent to what the Palestinian Authority was paying to prisoners before Finance Minister Bezalel Smotrich began to refuse to transfer any part of the Palestinian funds".

Smotrich, whose office refused to comment to the Times of Israel, has called for the collapse of the Palestinian Authority, and criticized Trump’s 20-point plan regarding Gaza.

Accordingly, he has refused to cooperate with the proposals discussed by the US and the Palestinian Authority to release the tax revenues - even to settle the Palestinian Authority’s debts to Israel - and the three officials familiar with the matter said they do not expect any progress even after the Israeli elections in the fall, when a new government and new finance minister may be formed.

A Middle Eastern intelligence official revealed that the United States, which is still striving to secure some funding for the Peace Council, where only a fraction of commitments have been fulfilled, has explored the possibility of unilaterally seizing some of the Palestinian funds held by Israel, clarifying that the legal justification for such a step would be weak.

A Peace Council official declined to comment on the matter, but stated that the Gaza oversight body would follow US law.

A Middle Eastern intelligence official indicated that another idea explored by the US is to persuade the World Bank to send aid allocated for Gaza services to the Peace Council instead of the Palestinian Authority.

In response to a question about the American efforts to strengthen relations with the Palestinian Authority, a State Department spokesperson said: "Reforming the Palestinian Authority is a prerequisite for alleviating Israeli security concerns."

The statement continued: "The president's 20-point plan and UN Security Council Resolution 2803 clearly emphasize the need for the Palestinian Authority to complete comprehensive, verifiable reforms, including stopping all payments to prisoners, martyrs, and their families. The prospects for the Palestinian Authority achieving greater financial stability should begin with completing its long-awaited reforms in a verifiable manner."