How a Major American Court Ruling Could Plunge the Palestinian Authority Into Crisis

A New York court ruled on Monday that the Palestinian Authority was responsible for six terror attacks that killed and wounded scores of civilians during the second intifada, a period of intense violence in the early 2000s between Israel and the Palestinians.

The verdict, which could cost the Palestinian Authority over $600 million, was accompanied by a scathing indictment from the lead prosecutor: “The PA and PLO policies of financial inducements and rewards for terrorism that are at the center of this case unfortunately continue today, more than a decade later.”

The case is a devastating loss for the Palestinians and an energizing win for the Israeli prosecuting team. It is also the opening salvo in a new era of the conflict: the legal phase.

The two sides' actions are no longer confined to popular protests in the West Bank and devastating flare-ups in Gaza. Their conflict has entered a realm of international legality, with lawsuits and appeals supplementing rocks and rockets. And after yesterday’s verdict, Israel appears to have won the first round.

The verdict is likely to impact the Palestinian calculus in two areas. The first is obvious: money.

The Palestinian Authority is strapped for cash. It's only been able to pay 60% of total employee salaries for the past two months, and Palestinian officials are certain they won’t be able to pay any salaries at all for March.

The PA’s economy depends on international donations and the revenues from taxes Israel collects on its behalf, revenues that Israel has withheld since the PA decided to sign the Statute of Rome and joining the International Criminal Court at the end of December.

Though Israel has a policy of responding to unilateral Palestinian moves at the UN by withholding these revenues — as was the case in 2012 when the Palestinians upgraded their status at the General Assembly — they are typically released back to the Palestinian Authority within a few months. Israel’s Prime Minister, Benjamin Netanyahu, however, shows no signs of releasing these revenues, which total over $100 million a month, any time before the upcoming Israeli elections in March.

The Palestinians may not have a few months to spare: roughly a third of the Palestinian work force depends on the PA in some way for their salaries. Clashes could erupt in the West Bank with that many people out of work or hurting for cash. Palestinian officials are panicking. One even warned that they might not have enough fuel for the police cars. Losing a multi-million dollar lawsuit may only increase the anxiety of Palestinian leaders.

The second effect of this ruling may be that it threatens the Palestinians’ convictions that their best weapon against Israel is the international community and specifically the International Criminal Court (ICC).

The PA is itching to get in the court and respond to this early loss by filing suits against Israeli leaders. The recent rhetoric out of Ramallah has focused heavily on blaming Israeli officials for possible war crimes committed this past summer in the Gaza war.

But now that the PA has been found culpable for the actions of even its most loosely-affiliated foot soldiers, questions may arise over whether the PA has the stomach for its ICC strategy. PA President Mahmoud Abbas signed a political agreement with Hamas in April, and a few weeks later the two sides formed a consensus government that was ostensibly charged with governing Gaza shortly before the outbreak of the war. Can Abbas and other PA officials now be held responsible at the ICC for rockets fired by Hamas? That’s the question that many Palestinian officials will be grappling with after Monday’s ruling.

In some ways, however, the Palestinian strategy at the ICC may not change at all. Prior to the Gaza war, Palestinian officials regularly labeled Israel’s settlements in the West Bank as a violation of the ICC’s charter, the Statute of Rome. According to Palestinian officials, the settlements are a clear violation of Article 8 of the Statute of Rome, which defines “the transfer, directly or indirectly, by the Occupying Power of parts of its own civilian population into the territory it occupies” as a war crime.

After the Gaza war, these accusations waned as calls for prosecution over Israel’s actions during the conflict escalated in the Palestinian street. Now that Abbas and his Palestinian Authority appear vulnerable to events that took place over a decade ago, expect the leadership to focus again on settlements with an eye toward April, when the PA becomes a full member of the ICC.

Abbas, to his full credit, has eschewed violence since he replaced Yasser Arafat as the leader of the Palestinians in 2005. When he took over the PA, Fatah, and the PLO, he attempted to purge the more violent factions from the organizations' ranks. However, this trial shows he is still liable for the sins of his predecessor, who believed that he would be able to extract diplomatic concessions from Israel through violence.

But it is not only the past that is cause for concern. Whether it is rogue members of his own Fatah party firing rockets into Israel during the Gaza war, or members of the Popular Front for the Liberation of Palestine (PFLP) — a member party of the PLO — committing terror attacks in synagogues in Jerusalem, violence is still all too common among the political parties that Abbas's system purports to control.

Monday’s verdict makes it clear that if Abbas cannot suppress the radical elements lurking in Palestinian politics, they could derail his legal battle against Israel.

Grant Rumley is a research analyst at Foundation for Defense of Democracies.