Mon Sep 23 22:20:36 UTC 2024: ## US Urges Israel to Extend Palestinian Banking Ties to Avert Crisis

**WASHINGTON** – The United States has urged Israel to extend its banking relationships with Palestinian banks for at least a year, warning that a potential economic crisis in the West Bank could threaten Israel’s own security.

Deputy Treasury Secretary Wally Adeyemo delivered the message in a meeting with Bank of Israel Governor Amir Yaron on Monday, expressing the U.S. government’s concern about threats by some Israeli officials to sever correspondent banking ties between Israeli and Palestinian institutions.

The current authorization is set to expire on Oct. 31, potentially jeopardizing export and import transactions valued at nearly $10 billion and destabilizing the Palestinian Authority, which relies heavily on the Israeli financial system.

Adeyemo also met with Jordan’s King Abdullah, emphasizing that cutting off Palestinian banks could lead to regional instability and push more Palestinian financial transactions into the shadows, ultimately harming both Israeli and regional security.

U.S. officials have been voicing these concerns for months, particularly following threats from Israeli Finance Minister Bezalel Smotrich to sever ties. Smotrich granted a four-month extension in June, but the U.S. is pushing for a full year to ensure financial stability in the region.

The World Bank has highlighted the precarious economic situation in the Palestinian territories, noting a significant decline in Gaza’s GDP and a projected $1.86 billion financing gap for the Palestinian Authority in 2024.

The U.S. has not publicly stated what actions it might take if Israel fails to extend the banking ties, but the situation is raising concerns about potential sanctions.

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