Israel announced it would restart regular monthly tax transfers to the Palestinian Authority, days after US President Barack Obama called for confidence-building steps toward peace during his visit to Israel.
Israeli Prime Minister Benjamin Netanyahu's office said he had instructed Finance Minister Yair Lapid "to resume the transfers". A spokesman for Netanyahu said that meant regular monthly payments would be made from now on.
Israel suspended the transfer of the money - about $100 million (77,7 million euros) in tax revenues it collects each month on behalf of the Palestinian Authority after PA President Mahmoud Abbas unilaterally obtained non-member UN observer status upgrade last November.
The tax transfers include customs duties that Israel collects on behalf of the Palestinian Authority for imports coming through Israeli ports, value-added taxes levied on large Palestinian purchases of Israeli goods, and excise taxes on fuel sold to the Palestinians.
From the taxes it collects, Israel has deducted the debt of the Palestinian Authority to the Israeli Electrical Company.
The funds are transferred under an economic agreement that followed the 1993 Oslo accords between Israel and the Palestinians.
Israel made again a transfer in January and in February but said at the time decisions on whether to continue would be made on a month-by-month basis.
Netanyahu’s spokesman, Mark Regev, said at the end of Obama’s visit that Israel was prepared to carry out confidence-building steps, provided they were also taken by the Palestinians.