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US may ask Israel to put Palestinian tax money toward Trump's Gaza plan, sources say

The proposal could funnel part of the $5 billion Israel withholds from the Palestinian Authority into a $70 billion Gaza reconstruction effort.

  • The United States is considering asking Israel to transfer part of $5 billion in withheld Palestinian tax revenue to President Donald Trump's Board of Peace to fund Gaza's reconstruction, according to five sources familiar with the matter.
  • Israel has withheld approximately $5 billion in taxes, citing the Palestinian Authority's prisoner-payment system; Washington and Israel argue the system incentivizes violence, while Palestinian officials defend the payments as welfare support.
  • Launched in January 2026, the Board of Peace oversees an estimated $70 billion rebuilding effort, with officials stating that "money held in a bank does nothing to further the President's 20-Point Plan."
  • No formal request has been made to Israel, as officials assess the proposal to potentially channel funds to a US-backed transitional government for Gaza, with other portions released to the Palestinian Authority if reforms occur.
  • Repurposing these revenues without Palestinian Authority input could further sideline the Western-backed administration, officials warned, as the authority faces a severe financial crisis and forced salary cuts in the West Bank.
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The United Nations Special Rapporteur for the Palestinian territories, Francesca Albanese, said against the White House’s request that the funds of the Palestinian National Authority, a product of tax collection, arbitrarily retained by the Israeli government, be used for the U.S. President Donald Trump’s Gaza plan. “The U.S. asking Israel to divert Palestinian tax money from the Gaza plan is three times illegal: retention is illegal, diversion …

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Bias Distribution

  • 38% of the sources are Center, 37% of the sources lean Right
38% Center

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Reuters broke the news in New York, United States on Friday, May 15, 2026.
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