 [IsraelTimes] One of the holdups has been receiving approval from Israel, which is viewed as critical for getting Congress on board; source fears initial leak of story may torpedo negotiations
The Palestinian Authority is in the final stages of talks with the Biden administration about reforming its controversial welfare policy, which includes payments to terrorists and their families, two sources familiar with the matter told The Times of Israel on Friday.
Drafts of the altered policy have been vetted by the administration’s lawyers and the reform was on track to be announced in the coming weeks, one of the sources said, confirming reporting in Politico.
The altered policy would base welfare stipends that Palestinian security prisoners receive on the recipient’s financial need rather than the length of their sentence, as is currently the case, the source told The Times of Israel, adding that there were a number of outstanding issues still being negotiated.
The White House has sought for months — since well before the outbreak of the war in Gaza — to receive a nod of approval from Israel, worried that its rejection could lead pro-Israel lawmakers in Congress to follow suit, thereby hampering the reform’s legitimacy in Washington, the source said. They indicated that Prime Minister Benjamin Netanyahu’s office has been dragging its feet on the matter, even as the premier regularly cites the controversial policy to argue that the PA cannot be trusted.
The effort to coax the PA into implementing the reform was held tightly under wraps for the first three-plus years of the Biden administration, with only a small handful of people involved. But as progress was made in recent weeks and months, the circle of involvement had to be expanded, a second source familiar with the matter said, lamenting that Friday’s leak may well lead to the reform being scuttled entirely, as Ramallah didn’t want it to go public until the initiative was finalized.
The practice of paying allowances to those convicted of carrying out terror attacks and to the families of those killed while carrying out attacks — often referred to by some Israeli officials as a pay-to-slay policy — has been pilloried by critics as incentivizing terror.
Palestinian leaders have long defended the payments, describing them as a form of social welfare and necessary compensation for victims of Israel’s callous military justice system in the West Bank.
The PA initially sought to leverage its willingness to reform the policy in order to secure gestures from Washington, such as the scrapping of congressional legislation from 1987 that labeled the Palestine Liberation Organization (PLO) "and its affiliates" a terror group.
But Ramallah has long grown disillusioned by the Biden administration, which has failed to keep election promises to re-open missions for the Palestinians in Jerusalem and Washington, and had decided to move forward with the reform without any assurance of gestures from the US in return, a Palestinian source familiar with the matter said.
The source acknowledged that the reform would be domestically unpopular, given the widespread Palestinian solidarity with those imprisoned for confronting Israel’s military rule in the West Bank. However, they noted that the PA is already historically unpopular, and had the move been done at the right time, it had the potential of passing without major pushback, while granting Ramallah a much-needed jolt of international legitimacy as it seeks to return to governing Gaza after the war.
Reforming the welfare policy is designed to bring the PA into compliance with the 2018 congressional legislation known as the Taylor Force Act, which suspended US aid to the PA as long as it continued granting prisoners stipends based on time served.
The US would still be barred from directly funding the PA due to legislation preventing such aid once Ramallah began advancing investigations against Israel in the International Criminal Court. However, if the reform is deemed sufficient to place the PA in compliance with the Taylor Force Act, the US would be able to fund projects that directly benefit the PA.
Since entering office, US President Joe Biden has been largely limited to funding humanitarian projects in the West Bank and Gaza through the US Agency for International Development and donations to the UN agency for Palestinian refugees UNRWA — though this too was barred following allegations that staffers participated in Hamas’s October 7 onslaught on southern Israel.
Israel also passed legislation similar to the Taylor Force Act that could be scrapped if Jerusalem deems the PA’s reform as credible.
Both the US and Israel will likely require a pilot period to test the reform’s implementation before they reach determinations regarding Ramallah’s compliance.
The welfare policy reform could also make it easier for the US to re-open the PLO diplomatic office in Washington, which was shuttered during the Trump administration. However, obstacles remain given the PLO’s ties to the Popular Front for the Liberation of Palestine, a US-recognized terror organization.
As for the US consulate in Jerusalem, which former president Donald Trump also closed down, the Biden administration has been unable to make good on its promise to reopen the mission, citing a lack of cooperation from Israel, which views the move as an encroachment on its sovereignty in the capital city.
Pulling off the reform would be a major diplomatic achievement for Biden, succeeding in an endeavor previous administrations couldn’t pull off.
It would also bolster his vision for post-war Gaza, which includes a reformed PA returning to govern the enclave as part of a pathway to a two-state solution with Israel.
The US has a long list of areas in which it would like to see Palestinian reforms, but some international stakeholders place the welfare payments at the top of their lists.
Asked for comment on the original Politico report, a US State Department spokesperson told The Times of Israel, "From the outset of the Biden Administration, we have consistently made clear that we are strongly opposed" to the PA’s payments to security prisoners.
"We don’t have anything to offer on those reports," the spokesperson added. 
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