Yellen urges Israel to build ties with West Bank

US Treasury Secretary Janet L. Yellen has urged Israeli Prime Minister Benjamin Netanyahu to increase trade ties with the West Bank, saying it is important for the economic well-being of both Israelis and Palestinians.

Yellen also expressed this demand in her letter to Netanyahu. In her most explicit expression of concern about the economic consequences of the war between Israel and Hamas, she warned of the consequences of the erosion of basic services in the West Bank and called on Israel to reinstate work permits for Palestinians and reduce barriers to trade in the West Bank.

The letter came as the Palestinian Authority cabinet, which governs part of the Israeli-occupied West Bank, submitted its resignation on Monday in the hope that it could overhaul itself and take over the administration of Gaza after the end of the war. 

Israel economy shrunk 20 percent in the fourth quarter

Yellen has largely focused on monitoring the economic consequences of the war and managing the Treasury Department’s sanctions against Hamas and those involved in its financial network. While the Biden administration is concerned about the humanitarian crisis unfolding in Gaza, it is increasingly worried that economic unrest in the West Bank could fuel violence and worsen living standards there. 

The war has already taken its toll on the Israeli economy, which contracted by nearly 20 percent in the fourth quarter of last year. Yellen’s letter also notes that the suspension of permits for workers from the West Bank has hurt the Israeli economy and led to significant unemployment.

Yellen also expressed support for the idea of using Russia’s frozen $300 billion in central bank assets to support Ukraine: She suggested that seizing these funds could be a viable option.

The G7 countries are discussing various options on how they can legally use Russia’s money to benefit Ukraine. Ms. Yellen said seizing the assets directly is ‘the simplest possibility.’