For years, the Palestinian administration in the occupied West Bank has doled out hundreds of millions of dollars in stipends to the families of Palestinians jailed or killed by Israel — including those involved in violent attacks.
The United States and Israel have long condemned the payments and pressured the Palestinian Authority to end them. And on Monday, the Authority announced that it was backing away from the practice — a shift that analysts saw as an attempt to curry favor with President Trump and bring much-needed foreign aid into Palestinian coffers.
Palestinian officials, speaking on condition of anonymity to discuss a sensitive issue, said the move was aimed to bring the Palestinian administration into compliance with American law and to allow for more foreign aid to flow. A U.S. law banned direct American economic assistance to the Palestinian Authority as long as it carried out the practice.
The ban has only deepened the economic distress of the cash-strapped Palestinian Authority in recent years and it has increasingly struggled to make ends meet and to pay its employees’ monthly salaries.
Mahmoud Abbas, the aging Palestinian Authority president, issued a decree on Monday night that overhauled the payment system. The stipends have been one of the most emotionally charged issues in Palestinian politics.
A body set up to manage social welfare payments to needy Palestinians, known as the Palestinian National Economic Empowerment Institution, said in a statement that the families of prisoners would receive funds based only on financial needs and social welfare criteria, “without regard to political affiliations or past actions.”
The law means that the families of prisoners would still be eligible for social welfare payments as long as they demonstrate a financial need, as opposed to being compensated for fighting against Israel’s rule.
The new system would abide by 43 internationally recognized criteria for assessing social welfare needs, the statement said.
Both U.S. and Israeli officials will closely monitor the implementation of the new policy to see whether it leads to a genuine shift.
Palestinians were quick to criticize Mr. Abbas’s decision. Many in the West Bank and Gaza view those imprisoned by Israel as either the victims of fundamentally unjust Israeli military courts or freedom fighters who fought back against their occupiers.
But Mr. Abbas is gambling on a new beginning with Mr. Trump after years of bad blood, and he is hoping for a muted domestic response, said Ibrahim Dalalsha, a Palestinian political analyst.
“This is the Trump effect. The Palestinian Authority wants to start off well with Trump,” Mr. Dalalsha said in a phone interview.
Since the U.S. election in November, Mr. Abbas’s government has sought to rebuild its relationship with the American president after his tumultuous first term. But Mr. Trump’s recent insistence that the roughly two million Palestinians should be transferred out of the Gaza Strip has already added new strains.
During his first term, Mr. Trump outraged the Palestinian leadership by moving the U.S. Embassy in Israel from Tel Aviv to the contested capital of Jerusalem, freezing most aid and peddling a peace plan they saw as deeply slanted in Israel’s favor.
Israel has argued that paying benefits to the families of prisoners who have been involved in deadly stabbings, shootings and suicide bombings against Israelis creates a financial incentive for terrorism. It has labeled the policy a “pay-for-slay” arrangement, in which Palestinians with longer sentences get higher stipends, effectively rewarding people for committing deadlier attacks in Israel’s view.
In response, Israel has withheld funds from the Palestinian Authority, often more than $100 million each year. The money is drawn from tax revenues Israel collects on behalf of the Palestinian administration.
In 2018, Mr. Trump signed the Taylor Force Act, which ended economic assistance that directly benefited the Palestinian Authority as long as it continued to disburse the stipends. In its statement, the new Palestinian welfare institution said the reform “aligns directly with the goals of the Taylor Force Act.”
The Israeli government quickly dismissed Mr. Abbas’s announcement as a sham, saying it would not end the practice of paying the families of prisoners.
“This is a new deception scheme by the Palestinian Authority, which intends to continue paying terrorists and their families through alternative payment channels,” said Oren Marmorstein, a spokesman for the Israeli foreign ministry.
Mr. Abbas’s decree was unlikely to immediately lead American aid to begin flowing again to the Palestinian Authority. Mr. Trump has yet to say publicly whether he is willing to support the Palestinian Authority.
And other legal hurdles would remain, including the extended process of certifying that Mr. Abbas’s government is in compliance with the Taylor Force Act.
If the Palestinian Authority enforces the changes, it would be a remarkable about-face for Mr. Abbas, who had previously insisted that he would never give up on the payments. In the past, he has gone so far as to say that even if the Palestinian Authority was running out of money, he would spend whatever remained on the stipends.
In late January, Hussein al-Sheikh, a top adviser to Mr. Abbas, informed Steve Witkoff, Mr. Trump’s Middle East envoy, that the Palestinian Authority was prepared to move ahead with revising its prisoner payments system, according to the Palestinian official and another diplomat.
The shift immediately prompted criticism in the West Bank, where the Palestinian Authority administers some areas, including major Palestinian cities. Hamas and Islamic Jihad, Mr. Abbas’s rivals, also condemned the decision.
Qadura Fares, the Palestinian Authority’s commissioner for prisoners’ affairs, called on Mr. Abbas to “immediately retract” the decree during a news conference on Tuesday.
“This move is deeply wrong,” said Esmat Mansour, a former prisoner who said he had served 20 years in prison for involvement in a stabbing attack against an Israeli. “The prisoners are icon. They are the ones who have sacrificed for our freedom.”
Natan Odenheimer and Fatima AbdulKarim contributed reporting to this article.
