Blinken pressed Netanyahu to release frozen Palestinian funds

Secretary of State Antony Blinken pressed Israeli Prime Minister Benjamin Netanyahu to release Palestinian tax revenues Israel's ultranationalist minister of finance Bezalel Smotrich froze in early May, three U.S. and Israeli officials told Axios.

Why it matters: The Biden administration is extremely concerned the Palestinian Authority could collapse if the tax revenues are not transferred soon, U.S. officials say.

An economic crash could in turn lead to an escalation in the West Bank in addition to the war in Gaza and rising tensions between Israel and Hezbollah in Lebanon.

Catch up quick: Tax revenues Israel collects for the Palestinian Authority under an agreement between the parties are a major source of income for the PA, which is already in a deep financial crisis.

After the Oct. 7 attack by Hamas on Israel, Smotrich suspended the transfer of all tax revenue funds to the Palestinian Authority.