Netanyahu agrees to hand over Palestinian tax revenue Palestinian president Mahmud Abbas Photo: AFP JERUSALEM: Israel has decided to transfer to the Palestinian Authority the tax and customs revenue Israel collected last month on its behalf, to help ease the authority's economic crisis, a senior Israeli government official said on Wednesday. The decision reversed one to withhold the revenue and use it to offset some of what the Palestinians owe to Israeli utility companies. That step was meant to punish the Palestinians after their successful bid in November to upgrade their status at the United Nations to that of a non-member observer state. The Israeli official said the decision to release the blocked money was "a one-time event" and was "not an indication of what Israel might do next month." It came after a meeting on Monday between the Israeli Prime Minister, Benjamin Netanyahu, and Tony Blair, the former British prime minister who is now a Middle East peace envoy for the US, European Union, United Nations and Russia, known as the quartet. In a statement, Mr Blair and Mr Netanyahu pledged to work on peace and security issues. A spokeswoman for the Palestinian Authority, Nour Odeh, said Palestinian and Israeli officials were due to hold a regular meeting on Wednesday at which they would calculate the amount of revenue collected and owed. The transfer from Israel was expected to be about $US100 million ($96 million). The Palestinian Authority, which has limited control over parts of the West Bank, has been in a financial crisis for about two years, largely because of a drop in support from donor nations. It has been struggling to pay its 150,000 government workers their full salaries on time, leading to growing restiveness and strikes. Israel's decision to withhold the revenue after the UN move was expected. Arab nations promised to help tide the authority over with additional donations, but those have yet to materialise. Israel has withheld transfers of Palestinian tax revenue at least five times, sometimes for weeks and in one case, after the outbreak of the Palestinian uprising in 2000, for two years. But the latest instance was the first time Israel said it would use the withheld money to defray Palestinian debts to the Israel Electric Corporation and other Israeli providers. Avigdor Lieberman, who was Israel's foreign minister at the time, said in December it would take four months of withheld tax revenues to clear up the authority's arrears, and he said no money would be released until the debts were paid. Mr Lieberman has since resigned. Palestinian leaders called the Israeli policy "piracy" and called for a boycott of Israeli goods, which seemed to have little impact. Israel is engaged in a delicate balancing act, since it has no interest in seeing the Palestinian Authority collapse, officials have said.