U.S. considers asking Israel to redirect withheld Palestinian tax revenue to Gaza rebuilding plan

The United States is considering asking Israel to release some tax revenue it has withheld from the Palestinian Authority and redirect it to Donald Trump’s Board of Peace to help finance a postwar Gaza rebuilding plan, according to five people familiar with the discussions. The Trump administration has not decided whether to make a formal request, the sources said, and officials in Washington were still weighing how any transfer would be structured.

Under the proposal, some of the withheld money would be used for a U.S.-backed transitional government for Gaza, while other funds would go to the Palestinian Authority if it undertakes further reforms, two Palestinians familiar with the talks said. The Palestinian Authority says the amount Israel is holding totals $5 billion, a figure that Israel has not publicly contested in the material provided. The sources did not specify how much the United States would ask Israel to transfer.

The potential redirection of Palestinian tax revenue would further limit the Palestinian Authority’s role in decisions about Gaza, officials and analysts have said in similar contexts, and the sources here pointed to the authority’s lack of influence in...