Israel Must Prepare for Collapse of Palestinian Authority

The new Israeli government’s decision to withhold millions of dollars in Palestinian tax revenues could have a crippling effect on the already struggling authority

After months of tension and violence between Israel and the Palestinians, a new political reality is threating to push the Palestinian Authority (PA) to the brink of collapse.

Both sides have been warning of an impending collapse for some time now. While these warnings are not new, circumstances have changed and may pose a significant threat to the stability of the already fragile Palestinian entity.

“Such threats have been heard for years, but have yet to materialize,” said Dr. Nimrod Goren, president of Mitvim – The Israeli Institute for Regional Foreign Policies and senior fellow for Israeli Affairs at the Middle East Institute. “Therefore, people might not believe them anymore and become indifferent toward dramatic events that may be looming.”

The PA was established in 1994 and is controlled by the Fatah Party after a split from Hamas in 2007. Led by President Mahmoud Abbas, the PA has full control of West Bank territory referred to as Area A and partial civil control over areas B and C, in which Israel maintains most of the control. Hamas controls the Gaza Strip.

Over time, Abbas’ power has eroded. A policy led by Israeli Prime Minister Binyamin Netanyahu has consistently weakened the PA while strengthening Hamas in Gaza. Abbas’ legitimacy among the Palestinian people gradually decreased. His continuous postponement of elections in the PA has significantly damaged his standing.

Hence, the threats to the PA are numerous and its collapse could come as a result of several different scenarios. An escalation in violence with Israel or a decision by Abbas to announce the dissolution of the PA as he has so often threatened, could both signal the end. Meanwhile, internal chaos due to a power struggle following Abbas’ departure could topple the PA. This could happen before or after the death of the 87-year-old leader.

“As long as Abbas is alive, the PA will survive. Once he is no longer in power, the PA will be on the brink of collapse,” according to Mkhaimar Abusada, an associate professor and chairman of the department of political science at Al-Azhar University in Gaza. “We could see Palestinian infighting and Israeli intervention. This is the scary point, where concern for the future of the PA would be very real.”

It is not only Israeli actions, but also the internal Palestinian rift between Fatah and Hamas that have chewed away at the power and legitimacy of the PA.

In addition, after a lengthy period of violence between the sides, a new right-wing Israeli government is threatening stability in the area.

As long as Abbas is alive, the PA will survive. Once he is no longer in power, the PA will be on the brink of collapse.

Last week’s decision by the new government to sanction the PA over its referral to the International Court of Justice (ICJ) on the legality of Israel’s presence in the West Bank could further weaken the PA.

All the while, security coordination between Israel and the PA has been largely unhindered. For Abbas, it helps to maintain his power and, for Israel, it allows access to the territories and the terror infrastructure. These mutual interests have thus far provided a solid guarantee of their continuation, as well as a critical lifeline for the PA.

Yet after a deadly year of violence in the West Bank, the outlook is grim.

“At some point, when the number of incidents will amass, the security coordination will no longer be effective and then the gradual collapse we are seeing now could lead to a full collapse,” Dr. Ely Karmon, a senior research scholar at the International Policy Institute for Counter Terrorism at Reichman University, told The Media Line.

Security coordination with Israel is a tricky subject among Palestinians and the new Israeli sanctions, including the revocation of VIP status for senior Palestinian officials, makes the PA more vulnerable.

“No matter what the PA is doing for Israel, this is what they get in return,” Abusada said. “Despite cooperating with Israel, the PA cannot escape Israeli punitive measures – this is how the Palestinians see it.”

Palestinian officials are clearly wary of the future.

“The measures taken by the current Israeli occupation government … are aimed at undermining the Authority and pushing it to the brink financially and institutionally,” PA Prime Minister Mohammad Shtayyeh said earlier this week.

Even though the current Israeli government wants to change the situation on the ground, the question remains whether the country is prepared for a collapse of the PA and its far-reaching implications.

The PA is already struggling to supply basic services to its citizens. A collapse would not leave a vacuum for long. Whether it be Israel or Hamas, someone will have to take charge of Palestinian lives in the West Bank, and it will be at a high cost.

“Israel needs stability on the Palestinian side which it needs to maintain,” said Goren. “A situation of chaos which will force Israel to take control of the territories is not good for Israel.”  

A Hamas takeover of the West Bank would be an unwanted, adverse effect of the PA collapse Israel is most definitely not interested in. Hamas, which refuses to recognize the Jewish state, has fought several wars against Israel from the Gaza Strip.

“The collapse of the PA as a result of internal chaos will lead to a strengthening of Hamas,” Karmon said.

Hamas control certainly will be the end of security coordination with Israel in the West Bank.

The announcement over the weekend that Israel would withhold millions of dollars in Palestinian tax revenues could have a crippling effect on an already struggling authority. Part of the money being confiscated by Israel will be given to families of Israeli victims killed by Palestinian assailants.

“It is the PA that is weakening itself, by being involved and encouraging terrorism against Israel,” said Israeli Finance Minister Bezalel Smotrich at a press conference announcing the sanctions.

Smotrich is an ultra-right-wing nationalist who has not hidden his aim that Israel reclaim control of all West Bank territories, also known by the biblical name Judea and Samaria. This goes together with dismantling the PA. Therefore, when asked if his moves would topple the PA, his answer was unapologetic.

“The PA has to decide whether it wants to continue to exist and continue to take care of the Arabs in Judea and Samaria … or if it prefers to cease to exist and return to being an enemy of the state of Israel who we will fight against,” he said.

The PA pays a significant amount of money to Palestinian prisoners who are held in Israeli jails after being convicted of terrorist activities. It also provides financial support for the families of prisoners and dead or injured fighters.

In past years, Israel has withheld tax revenues from the Palestinians intermittently, further damaging an already grim financial situation in the PA.

“If the sanctions will create a more acute situation, there will be a counterreaction by the Palestinians,” said Goren. “It is a question of how far the Israeli government will go. The PA is as weak as Netanyahu wants it already, how can it be weakened any further?”

According to a report by the International Monetary Fund (IMF) from 2022, the Palestinian economy is facing “formidable challenges,” with a high budget deficit that is not going away. International aid also has decreased significantly in recent years.

A situation of chaos which will force Israel to take control of the territories is not good for Israel

Palestinian and Israeli lives are deeply intertwined, especially in the West Bank territories. An estimated half a million Jewish settlers live among approximately three million Palestinians.

There are already certain areas in the northern West Bank in which PA control is flimsy. The presence of locally organized militia, with no Fatah or Hamas affiliation, that operate against Israeli forces was enabled initially by the PA’s weakness and is now fueled by continued friction with Israel.

This has already led the Israeli military to increase its presence in the area, diverting forces from other areas. The sustainability of such a diversion could come into question if Israel is forced to act elsewhere, among the myriad of threats it faces on a daily basis.

The appointments Netanyahu made in the defense and foreign ministries of political allies from his own Likud party, who are not considered as extreme right-wing as his coalition partners, may indicate that Netanyahu is playing a game of calculated brinksmanship.

“Netanyahu wants to create a certain stability and will unlikely make big moves; he will gradually solidify Israel’s hold in the West Bank without bombastic announcements,” said Goren.

“All the measures will lead to a deterioration in the image of the PA in the eyes of the Palestinians,” said Abusada.

The Netanyahu government also decided in recent days to freeze construction plans for Palestinians in Area C.

“The Israeli perception is that it can contain the deterioration and any violent escalation,” said Goren.

This is not necessarily so, but it is a gamble the current Israeli government appears willing to take.