RAMALLAH (EJP) --- Palestinian Authority (PA) Prime Minister Salam Fayyad called for a boycott of all Israeli-manufactured goods Sunday “as a way of resisting the occupation”. Speaking to local reporters in the PA’s West Bank Ramallah headquarters, he added that the complete economic boycott would serve as a direct response to Israel’s widely-condemned move to withhold tax levies owed to the PA in payment to the Israel Electricity Company for the Palestinian administration’s outstanding $120 million (€91 million) debt.

Conceding the suggested move would violate an existing interim peace agreement with the Jewish State, in which both sides committed to continued economic cooperation, the US-trained economist nevertheless insisted it was justified because “the Israel government is working against this agreement” by withholding taxes from the beleaguered Palestinian economy.

Fayyad’s Israeli counterpart Benjamin Netanyahu previously described the PA’s successful bid to the UN General Assembly for non-member observer status last month as “a gross violation of the agreements that have been signed with the State of Israel; accordingly, the Government of Israel rejects the UN General Assembly decision”.

Fayyad has previously advocated a boycott of Israeli settlement produce, which he claims is designed to starve the Israeli economy of illicit earnings from so-called occupied Palestinian territories.

Responding to the Palestinian Premier’s calls, Israeli foreign ministry spokesman Yigal Palmor said the PA should “concentrate efforts on how to build their own economy, not how to boycott someone else’s”.

Israel came in for criticism from MEPs at the European Parliament plenary session in Strasbourg last week, when a majority of the chamber voted for a resolution condemning the Israeli government’s decision “to withhold USD 100 million in Palestinian tax revenues, which undermines the Palestinian Authority’s budget, and calls for the immediate transfer of these revenues; encourages involved parties to settle all outstanding financial disputes under the mediation of the EU”, a move Israel has claimed would be the natural reaction of any western government to redress a debt owed to one of its national companies.

Opening a debate ahead of the vote Wednesday, Cypriot Foreign Minister Erato Kazakou Markoulis, standing in for the absent EU foreign policy chief Catherine Ashton, called on Israel “to avoid any steps undermining the financial situation of the PA”.

Contractual obligations, notably under the Paris Protocol, regarding full, timely, predictable and transparent transfer of tax and custom revenues have to be respected,” she reiterated.

Belgian Liberal Democrat Annemie Neyts-Uyttebroeck added: “We do regret the decision to withhold taxes, especially (coming) days after the UNGA vote and it seems to us that by these announcements, the Israeli government is undermining the legitimacy of Mahmoud Abbas and by ricochet, such an undermining of his legitimacy can only reinforce the status of Hamas, which from the point of view of Israel is kind of a paradoxical attitude”.

Speaking up in Israel’s favour, however, British Conservative Charles Tannock insisted the government had offered “a robust defence for withholding PA funds in order to pay Israeli companies, particularly the Israel electricity company, owed a lot of money”.