Israeli banks are near a deal to delay cutoff of Palestinian services and the Israeli government seeks to avert a collapse of the Palestinian Authority economy, according to Times of Israel

Israeli banks are near a deal to delay cutoff of Palestinian services and the Israeli government seeks to avert a collapse of the Palestinian Authority economy, according to Times of Israel.

This is a recurring fixture rather than a novel event: the annual waiver by which Israeli banks are indemnified against handling Palestinian counterparties has been extended repeatedly under international pressure, with previous episodes of threatened cutoff resolved at the deadline. The transmission concern is the correspondent banking channel; a cutoff would sever the Palestinian banking system from Israeli shekel clearing and dollar access, with the knock-on risk of a fiscal collapse in the Authority given the clearance revenues Israel collects on its behalf. Actors with form here include the Israeli security establishment, which has historically argued for continuity on stability grounds against political pressure to cut ties, and US and European intermediaries who have pressed for extensions in past rounds. The signal worth tracking is whether the delay is a short technical extension or a longer structural arrangement, since temporary waivers have tended to reproduce the same cliff edge at the next expiry. Market expression in comparable episodes has been limited to the shekel and local risk sentiment rather than the broad dollar or energy complex; a failure to extend, rather than an extension itself, would be the surprise. As a near-deal report attributed to a single outlet, confirmation from the parties involved is the immediate follow-on.