Palestinian Cabinet Warns National Institutions May Be Unable to Sustain Public Services Amid Israel's Continued Illegal Withholding of Palestinian Clearance Revenues
Palestinian Cabinet Warns National Institutions May Be Unable to Sustain Public Services Amid Israel's Continued Illegal Withholding of Palestinian Clearance Revenues
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Vital sectors are at risk of shutdown
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Temporary suspension of some public departments is under consideration
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Intensive political and legal efforts are underway to recover illegally withheld Palestinian funds
(RAMALLAH, July 17, 2025) The Palestinian Cabinet has warned of the grave and mounting consequences of the ongoing all-out Israeli war against the Palestinian people in the Gaza Strip and the West Bank, including East Jerusalem; continued settler violence; restrictions on movement at border crossings; and the continued withholding of Palestinian clearance revenues—constituting more than two-thirds of the Government’s total revenues.
In an emergency session held Thursday evening, the Cabinet underscored that these developments gravely threaten the Palestinian Government’s ability to sustain the provision of essential public services, particularly in the health, education, and social protection sectors, as well as other vital areas.
The cumulative amount of Palestinian funds illegally withheld by Israel has now surpassed 9.1 billion shekels (4.16 billion AUD), including over 8.2 billion shekels withheld to date, plus the clearance revenues for the past two months.
This financial strangulation has severely undermined the Palestinian Government’s capacity to meet its core obligations, most notably in the healthcare sector, where acute shortages of medicines and medical supplies pose an imminent risk of systemic collapse. Other institutions are similarly affected, as deepening poverty and unemployment endanger societal cohesion and civil stability.
The Cabinet further cautioned that the Palestinian Government’s continued inability to fulfill its obligations—including the payment of public sector salaries—will inevitably degrade the quality of service delivery and institutional performance. As a result, the Government may be forced to consider temporarily suspending the operations of certain departments and a reduction in working hours across public institutions.
The Cabinet reaffirmed that the Palestinian leadership, headed by President Mahmoud Abbas, is continuing to undertake intensive political and legal efforts to restore the withheld clearance funds and safeguard Palestinian rights. It urged the international community—particularly the United States, as a signatory to the Oslo Accords, and France, as the host of the Paris Protocol—to take immediate and decisive action to compel Israel to fulfill its legally binding obligations. The Cabinet warned that time is running out for the international community to take meaningful action to ensure peace and stability in the region.
Despite these unprecedented challenges, the Palestinian Government remains committed to recovering the illegally withheld revenues and mobilizing all possible resources to meet its core financial obligations, including salaries for public sector employees and ensuring the delivery of essential services to the Palestinian people.
The Cabinet also directed all public institutions to immediately adopt necessary adjustments to working arrangements in light of the fiscal emergency, in order to ensure the continued provision of critical public services.