Norway has agreed to help transfer frozen funds from tax revenues that belong to the Palestinian Authority and are collected by Israel, the Norwegian government announced on Sunday.

Based on the Oslo agreements, Israel’s finance ministry collects taxes on behalf of the Palestinians and transfers the money to the Palestinian Authority every month. However, since Hamas attacked Israel on October 7, controversy has erupted over the issue.

The temporary solution will allow payments to resume and prevent the Palestinian Authority from collapsing financially, allowing it to cover costs for essential services such as schools and hospitals, Oslo explained.

“It is critical to promote stability in the region and for the Palestinian Authority to have legitimacy among its people,” Norwegian Prime Minister Jonas Gar Stere explained.

The agreement stipulates that Norway as mediator will keep the tax revenue that Israel collects and withholds from October 7.

The part of the money that Israel is estimated to be earmarked for the Gaza Strip will remain in Norway, while the rest will be given to the Palestinian Authority.

When asked whether the Palestinian Authority maintains control over the expenses covered by the money it receives or whether it has pledged not to send resources to Gaza, a Norwegian foreign ministry spokesman said those questions should be addressed to the Palestinian Authority.

Access to tax revenue is critical to the survival of the Palestinian Authority, which exercises limited powers in the occupied West Bank.

Several Western countries, including the US, also want the Palestinian Authority to play a role in governing the Gaza Strip after the end of the war.

On November 2, Israel announced that it would transfer the tax revenue to the Palestinian Authority, but withhold the corresponding amount for Gaza, which is ruled by Hamas. But the Palestinian Authority helps cover the costs of the salaries of civil servants in the Palestinian enclave and funds welfare and health care programs there.

On November 6, the Palestinian Authority announced that it wanted the full amount and stressed that it would not accept conditions that would prevent it from paying salaries for its staff. It is estimated that around 30% of the Palestinian Authority’s revenue goes to Gaza.

On January 21, Israeli officials indicated that the cabinet had approved a plan to keep frozen tax revenue earmarked for Gaza in Norway instead of going to the Palestinian Authority.