Israel is lifting crippling economic sanctions on the Palestinian Authority in the West Bank. As Robert Berger reports from VOA's Jerusalem bureau, the move is in response to the violent takeover of the Gaza Strip by the Islamic militant group Hamas.

Mahmoud Abbas, 14 Jun 2007

Israel transferred $120 million in withheld tax revenues to western-backed Palestinian President Mahmoud Abbas. The aim is to strengthen the moderate Abbas government in the West Bank, while isolating Hamas in Gaza.

Israeli Cabinet Minister Yitzhak Herzog.

"Now that the Hamas is out of the government, therefore we can definitely cooperate with this coalition to enhance and enable a moderate government to prevail in the West Bank," Herzog said.

Palestinian officials welcomed the transfer of funds.

"Despite the fact that President Abbas has been weakened by what has happened in Gaza, we do believe that very clear, direct steps will endorse his legitimacy," Justice Minister Riad al Maliki said.

Officials on both sides say Mr. Abbas can now show his people the tangible benefits of the peace process. For the first time in more than a year, he will be able to pay the full salaries of 165,000 civil servants. Employees in Hamas-controlled Gaza, however, will not be paid.

Putting further pressure on Hamas, Israel announced that it stopped an attempt by the group to increase its influence in Jerusalem. Israeli agents broke up what was described as a Hamas secret command that received funds through fictitious Islamic charities. Eleven alleged Hamas members were arrested.