Israel has repeatedly warned that the PA’s “pay‑for‑slay” stipends create a built‑in incentive structure for violence.
By Hezy Laing
For years, much of the international community has portrayed the Palestinian Authority (PA) as a pragmatic, stabilizing alternative to Hamas—especially in discussions about who might govern Gaza in the future.
Western diplomats frequently describe the PA as a “moderate partner,” arguing that strengthening its institutions is essential for regional stability.
This framing has led many governments, including the United States, to channel significant financial support to the PA in hopes of empowering it as a responsible governing body.
Yet Israeli security experts warn that this assumption overlooks deep structural problems inside the PA’s financial and political system.
A growing number of Israeli analysts and former officials argue that portions of international aid to the PA risk indirectly supporting terrorism, primarily through the PA’s controversial prisoner‑payment system and weak financial oversight.
The Israeli Ministry of Defense has repeatedly warned that the PA’s “pay‑for‑slay” stipends create a built‑in incentive structure for violence.
The PA allocates hundreds of millions of shekels annually to salaries for imprisoned terrorists, released prisoners, and families of attackers killed during attacks.
Israeli government data shows that in 2023, the PA spent approximately 600 million shekels (around $160 million) on these payments—representing over 7% of its total budget.
Israeli officials describe the program as a direct financial incentive for terrorism, noting that payments increase with the severity of the attack and length of prison sentence.
Since October 7th 2023 the United States has transferred over $100 million to the Palestinian Authority.
In an official briefing, the ministry stated that the payments “constitute a direct financial reward for acts of terrorism and encourage further attacks.”
Former Shin Bet (Israel Security Agency) officials have echoed this concern.
One senior retired officer told Israeli media that “any external funding that enters the PA budget without strict monitoring risks being diverted to the prisoner and martyr funds, which are central to the PA’s political identity.”
He added that the PA’s financial system is “porous enough that money is fungible, even when donors believe they are earmarking it for civilian purposes.”
The Jerusalem Center for Public Affairs (JCPA), a prominent Israeli research institute has published multiple analyses arguing that foreign aid can unintentionally subsidize terrorism.
A JCPA report concluded that “international donors effectively underwrite the PA’s terror‑reward policy by covering other budgetary needs, freeing domestic funds for the prisoner payments.”
Similarly, the Meir Amit Intelligence and Terrorism Information Center has documented how PA budget allocations shift after foreign aid arrives.
The center wrote that “the PA’s financial behavior demonstrates a clear pattern: external aid reduces pressure on the leadership to reform the terror‑reward system and allows it to continue operating uninterrupted.”
Even some Israeli economists have raised red flags. A former Finance Ministry adviser noted that “the PA’s budget is a single pool.
When donors pay for salaries or infrastructure, it enables the leadership to divert its own revenues to politically sensitive programs, including payments to convicted terrorists.”
These experts emphasize that they are not opposed to humanitarian support for Palestinians.
Their concern is structural: without strict conditionality and transparent auditing, foreign aid can unintentionally sustain policies that incentivize violence.
