Palestinians paying high financial price for uprising

JERUSALEM — The Israeli government has suspended the transfer of funds to the Palestinian Authority Prime Minister Ehud Barak announced Thursday.

"The money that was to have been transferred to the Palestinian Authority under the agreements concluded has not been for a few days and that will continue for as long as necessary," Barak said.

Israel had agreed to pay out millions of dollars to the PA in value added tax and customs duties on goods that pass through the Israeli checkpoints to the West Bank and Gaza Strip, Middle East Newsline reported.

The annual amount paid by Israel to the Palestinians is at least $320 million.

Israel also pays specific employee benefits to 120,000 Palestinians who lost their jobs due to the government's closure of the territories in early October.

The United States has also suspended funding to the PA.

Meanwhile, Barak says he will continue his policy of restraint towards the PA and will resume negotiations if Palestinian Authority Chairman Yasser Arafat implements a drastic reduction in the level of vilolence.

"Israel will continue to lead this fight, which has been imposed on us, all the while keeping open to a resumption of negotiations with the Palestinians. But this cannot happen without a significant drop in the level of violence," Barak said.

On Thursday, Arafat will meet with US Middle East special envoy Dennis Ross. He will also meet with Russian Foreign Minister Igor Ivanov.

Arafat is demanding that an international peace-keeping be deployed in the West Bank and Gaza Strip. Israel has strenuously objected to this demand. On Thursday, Israel denied reports that Israeli and Palestinian officials held secret talks to discuss a UN peace-keeping force at the UN headquarters in New York.