Israel put $160,000 in Arafats account, newspaper says

The money in the account is Israeli refunds of tax revenues levied on fuel used by residents of the Palestinian autonomous areas, the paper said.

Other tax revenues Israel is obligated to return under the Israel-Palestinian economic accords are deposited in four bank accounts in the Palestine Bank and the Arab Bank in Gaza.

Ha'aretz quoted an internal document from the International Monetary Fund, which said the money in the Tel Aviv account "is not under any kind of supervision or monitoring by the Palestinian Finance Ministry."

International donors have demanded full accountability of the Palestinian budget before releasing funds.

Ha'aretz reported that the Tel Aviv account appeared to be a way to circumvent this supervision. The account also appeared to be a way for Palestinian Authority clerks whose employment was not approved by the donor nations to receive money.

An Israeli government source said some of the money was earmarked for a possible emergency. According to the source, the money could also serve the Palestinian leader in the event of an uprising against him.

Labor Knesset member Avraham Shohat, who served as finance minister in the governments of Yitzhak Rabin and Shimon Peres, did not deny the existence of the account.

Interviewed on Israel Radio, Shohat said the economic agreements called for various revenues to be transferred to different accounts.

"We have our own matters to deal with," he said. "We can't be on top of theirs."

Former Israeli Internal Security Minister Moshe Shahal told Ha'aretz that Rabin "used to talk about it often. These many accounts made him angry. He tried to talk to Arafat about it, but Arafat was deeply insulted."