Palestinian Authority’s financial plight threatens US plans for post-war Gaza

The Biden administration is looking to financially prop up the Palestinian Authority amid warnings from officials in Ramallah that it is close to running out of money, potentially jeopardising US hopes that the organisation will be able to govern Gaza when Israel’s war with Hamas is over.

The administration is trying to work around a law that prevents it from contributing directly to the Palestinian Authority, while also nudging allies to give more to the organisation, US officials said. Palestinian officials have warned that they could run out of the money needed to pay salaries and provide essential government services as soon as late February, the US officials said.

Early in the war in Gaza, the US opted to rely on a revitalised Palestinian Authority as the best, if not only, option for what it has described as “the day after” the war ends. US officials said they are concerned that without a revenue boost, the organisation won’t be stable enough to maintain its hold on power in the West Bank, let alone be in a position to take on an expanded role.

The organisation’s financial plight also limits its ability to implement overhauls the US says are needed to secure support from Israel and from the Palestinian public. The Palestinian Authority has been dogged by accusations of corruption and ties to extremists that led to the cut-off of US funds in the first place.