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CNN Live Today

Israel Could Release Portion of Frozen Tax Funds to Palestinian Authority

Aired July 22, 2002 - 13:25   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: In the Mideast, Israel could release a portion of frozen tax funds to the cash-strapped Palestinian Authority. But Israeli officials do not want that money to fund any terror organizations.

As those talks continue, CNN's Chris Burns reports, the families of suicide bombers are getting money from another source.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT (voice-over): It's a ceremony underwritten by Saddam Hussein. Like oversized checks for sweepstakes winners, the money is handed out with fanfare in a Gaza Strip refugee camp. Israelis call it "blood money," Palestinians call it compassionate support: $10,000 for each family of a Palestinian killed in the 21-month-old intifada against Israeli occupation; $25,000 for the relatives of a suicide bomber.

This father of a suicide bomber is thankful for the Iraqis.

"Their financial support to the brothers and relatives of the martyrs is out of their desire for us to live a free life," he says.

As the Iraqi-based group, the Arab Liberation Movement, wins over hearts and minds with cold cash, the Palestinian Authority struggles with corruption, and a cash crunch. Public services are neglected, as Israel withholds Palestinian tax and customs revenue, more than $400 million of it.

The Israelis have shut off more than the money taps. They've clamped down on the West Bank with their month-old operation "Determined Path," aimed at halting militants attacks. Two more such attacks left a dozen civilians dead in the past week, prompting the Israeli's to round up militants' relatives and threaten to move them to the Gaza Strip.

Still, high-level Israeli-Palestinian talks have resumed. No major agreements yet, but the will to hold more talks in the coming days.

SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR: We urged the Israeli side to immediately withdraw from the areas which they've occupied, and to lift the closure and the siege. BURNS (on camera): The Israelis have begun to lift that siege by easing curfews on the West Bank. And the latest talks focus on Israelis possibly unfreezing 10 percent of the Palestinian tax money, that's tens of millions of dollars, but only if the United States monitors where it goes.

(voice-over): Israeli cabinet minister Dani Naveh attended the meeting.

DANI NAVEH, ISRAELI CABINET MINISTER: We have to make sure that this money won't be used for terrorist activities. It's cash the Palestinian Authority desperately needs, as it competes with militant groups ready to hand out fistfuls of so-called blood money.

Chris Burns, CNN, Jerusalem.

(END VIDEOTAPE)

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