By Dr. Nabil Kukali
If preventing the collapse of the Palestinian Authority remains part of Eisenkot’s security outlook, the economic test for any government he leads will be its ability to make the movement of Palestinians, workers, goods, revenues, and funds more stable and predictable.
If Gadi Eisenkot leads the next Israeli government, what could Palestinians realistically expect from him economically? The question should not begin with the assumption that an Israeli prime minister can, on his own, “solve” the problems of the Palestinian economy. That economy also depends on Palestinian reforms, investment, a private sector capable of operating and growing, and international support.
But the Palestinian case is different from that of an independent economy with full control over its monetary, trade, and sovereign policies. The Palestinian economy is structurally and deeply linked to the Israeli economy, a relationship institutionalized by the 1994 Paris Economic Protocol, which established much of the framework governing trade, taxation, customs, and monetary relations Dr. Nabil Kukali Founder and President, of the PCPO between the two sides, including arrangements concerning trade, VAT, clearance revenues, and labour.
This connection is visible in everyday economic life. The Israeli shekel is the most widely used currency in Palestinian transactions. Clearance revenues constitute a major source of public income. A significant share of Palestinian imports and exports moves through crossings and ports subject to Israeli control and procedures. Many Palestinians depend on access to the Israeli labor market. Palestinian banks are also linked to the Israeli financial system through correspondent banking arrangements, while at the same time facing the continuing problem of transferring surplus shekels. Israeli policy therefore does not affect the Palestinian economy through one decision alone. It operates through a chain of interconnected pressure points: employment in Israel, checkpoints and road gates, crossings, trade flows, clearance revenues, correspondent banking, and the transfer of surplus shekels. A disruption in one part of that chain can quickly move through the rest of the economy — from public finances to banks, from banks to businesses, and ultimately from businesses to workers and families. This is where an important point in Eisenkot’s own record becomes relevant.
In September 2022, The Jerusalem Post reported that Eisenkot warned that dismantling the Palestinian Authority and annexing the West Bank could lead Israel to “catastrophe.” That statement came before October 7, 2023 and the political and security changes that followed. It should therefore not be treated as a government program for 2026. What it does show is that, at that time, preventing the collapse of the Palestinian Authority was consistent with his security
and institutional thinking. The significance of this issue goes beyond the survival of one political institution. Weakening or dismantling Palestinian institutions raises broader questions about the ability of Palestinian society to preserve its economic, social, and institutional cohesion, particularly under conditions of restricted movement, limited access to land and resources, and increasing difficulty in maintaining connections between Palestinian areas.
As institutional and geographic fragmentation deepens, it may become increasingly difficult for the Palestinian economy to function as an interconnected system, while Palestinian communities risk becoming more economically and socially isolated from one another. That leads to a more specific economic question: If preventing the collapse of the Palestinian Authority serves, from Eisenkot’s perspective, an Israeli security interest, can that objective really be separated from the economy that allows the PA to pay salaries, provide services, and keep its institutions functioning — and from a society
that needs access to work, mobility, trade, and money?
The first practical test of that question is the issue of Palestinian workers. In an interview published by Israel Hayom on August 27, 2026, Eisenkot addressed the broad restrictions on Palestinian workers entering Israel primarily from a security perspective. He argued that preventing workers from entering had not stopped Palestinians from entering Israel illegally
and without supervision, and suggested that allowing Palestinian family breadwinners to work after security screening and under Shin Bet supervision could make more sense than maintaining the current situation. But it is important not to attribute to Eisenkot more than he actually said. He did not announce a comprehensive reopening of the Israeli labour market to Palestinians. He did not specify how many workers might be allowed to return, nor did he provide an implementation timetable. His argument was primarily security-based, even if the policy he discussed could, if implemented, have direct economic consequences for families that depend on this income.
This is where security policy quickly becomes a household economic issue. For a worker, returning to a job does not simply mean recovering employment. It can mean income returning to a household, greater ability to buy food and medicine, pay debts and other obligations, and restore some purchasing power to the Palestinian market. PCPO findings illustrate the scale of the issue in Palestinian public perceptions. 59.9% identified restrictions on working in Israel and the decline in permits as a major economic challenge. 79.3% pointed to unemployment and limited job opportunities, while 70.2% cited declining income and weakened purchasing power. These figures reflect how respondents perceive the economic pressures they face; they are not official unemployment rates. Yet bringing workers back, however important, would not by itself restore the economic cycle to normal functioning.
A worker who receives a permit must still be able to reach the workplace within a reasonably predictable time. A company needs its employees and raw materials to arrive. A trader needs to move goods. A factory needs to know when a truck will arrive and when it will leave. That brings us directly to the second link in the same economic chain: checkpoints and road
gates. These are not only questions of movement and security. They are also a direct part of the cost of doing business, and of the Palestinian economy’s ability to operate, plan, and invest.
In April 2026, the UN Office for the Coordination of Humanitarian Affairs, OCHA, published the results of a field survey conducted in December 2025 documenting 925 movement obstacles across the West Bank, including East Jerusalem. These included 89 checkpoints operating around the clock, 218 partial checkpoints, and 232 road gates. OCHA also documented 459 obstacles that block or hinder access between Palestinian communities and major roads, forcing people onto longer routes and affecting access to workplaces and services. For the private sector, a checkpoint is not simply a delay. It can mean a worker arriving late, a truck being forced to take another route, raw materials failing to arrive on schedule, or a company being unable to promise customers a reliable delivery time. It is therefore significant that 62.8% of respondents in PCPO polling identified restrictions on movement and mobility as a major economic challenge.
And the issue extends beyond movement within the West Bank.
The King Hussein/Allenby Bridge is a principal land gateway connecting Palestinians with Jordan and the wider world. According to arrangements announced by the Palestinian General Authority for Borders and Crossings and reported by WAFA in August 2026, regular operating hours were scheduled to return on September 22 to 8:00 a.m. until 1:30 p.m. in both directions, following special holiday arrangements. The Israel Airports Authority, meanwhile, publishes different
operating hours for the Israeli side depending on the day and direction of travel and states that the crossing is closed on Saturdays. This detail matters not only because operating arrangements differ between the two sides, but because of what those arrangements mean economically. For a traveler, it may mean hours of waiting. For a trader, businessperson, patient, or student, it can mean difficulty planning the day. For an economy, it means uncertainty. PCPO findings show how strongly Palestinians connect freedom of movement with their economic future. 70.6% selected facilitating freedom of movement, 70.2% supported operating the King Hussein Bridge and other crossings around the clock while reducing waiting times, and 69.9% selected removing or reducing military checkpoints inside the West Bank. Yet respondents did not necessarily place mobility in opposition to security. When asked to choose between freedom of movement and security and stability, 68.3% said the two were equally important. That finding is particularly relevant when considering Eisenkot, a former chief of staff whose experience was shaped heavily within Israel’s security establishment.
The economic question is therefore not whether security considerations will disappear. It is whether they can be managed in ways that also reduce the uncertainty and costs borne by people and businesses. From the movement of people and goods, the argument moves naturally to the movement of public revenue: clearance revenues. This may be the most direct financial test of the idea of preventing the PA’s collapse. According to an analysis published by Israel’s Institute for National Security Studies in 2026, clearance revenues actually transferred to the Palestinian Authority after deductions fell from approximately NIS 8.8 billion in 2022 to NIS 7.9 billion in 2023, then to NIS 4.4 billion in 2024 and roughly NIS 2 billion in 2025. More than NIS 4 billion was withheld in 2025. At the same time, the institute noted that increased foreign assistance and alternative financing mechanisms offset part of the revenue decline and helped the PA continue operating.
That distinction is important because the Palestinian economic crisis cannot be reduced to clearance revenues alone.
But clearance revenues also demonstrate how a figure on a government balance sheet can quickly become a human issue.
Behind a government budget is a household budget.
In a PCPO survey of 503 Palestinians conducted between June 24 and July 5, 2026, 83.5% said delayed or reduced salaries had changed their household spending patterns. The effects were not limited to non-essential purchases; they extended to food, medical treatment, education, utility bills, loans, and debt. Eisenkot has not, so far, announced a specific policy on clearance revenues. There is therefore no basis for claiming that he would release withheld revenues or end existing deductions. But if preventing the collapse of the PA remains part of his strategic reasoning, one question becomes difficult to avoid: How can an institution be kept functioning when its principal source of revenue remains unstable? From public revenue, we move to the movement of money itself. This is where the problem of correspondent banking becomes critical.
On September 1, 2026, Reuters reported that Bank Hapoalim and Israel Discount Bank would continue providing correspondent banking services to Palestinian banks through the end of 2026. Approximately NIS 51 billion in transactions annually pass through these relationships, while roughly 90% of Palestinian trade depends on access to the Israeli financial system.
Reuters also quoted Bank of Israel Deputy Governor Andrew Abir as saying that the next Israeli government would need to find a long-term solution to the issue. This is not simply a technical banking matter. These channels process payments connected to trade, imports, fuel, medicine, and basic goods. In PCPO polling, 65.7% of respondents who gave valid answers said banking restrictions had a large or very large impact on companies’ ability to continue operating. That figure rises to 88.3% when those reporting a moderate impact are included. Closely connected is the problem of surplus shekels.
When large amounts of cash accumulate in Palestinian banks and cannot be transferred regularly, the cost of managing liquidity rises and pressure builds within the financial system. Electronic payments can reduce dependence on cash, but, as the PCPO analysis notes, they do not solve the clearance revenue problem, replace correspondent banking, or by themselves provide the foreign currency required for trade.
This is where the issues that may appear separate begin to form one larger economic story. Workers, checkpoints, crossings, clearance revenues, banks, and surplus shekels are not separate crises. They are links in one economic cycle.
When revenues decline, salaries are affected. When salaries are delayed, households reduce spending. When demand weakens, businesses lose sales and become less able to hire or invest. When workers and goods cannot move predictably, costs rise. And when money cannot move normally through the banking system, pressure accumulates elsewhere in the economy. This is what can be described as a “constrained Palestinian economic cycle”: an economy in which production, consumption, and investment are shaped not only by ordinary market forces, but also by repeated restrictions on the movement of workers, goods, revenues, cash, and credit. Palestinians themselves appear to recognize that no single measure is enough. In the PCPO survey of 503 respondents, 49.3% selected an integrated package combining support for the private sector, resolution of the clearance revenue crisis, measures addressing surplus shekels, and support for small businesses.
The effects also extend beyond income and markets. In another PCPO survey, 90% agreed that worsening economic conditions and rising unemployment could increase frustration and extremism among some individuals. That finding does not establish that poverty or unemployment causes extremism, nor does it mean that unemployed people are more inclined toward extremism. It measures a public perception that prolonged economic blockage and lack of opportunity can contribute to frustration and social tension. This brings us back to the question with which the article began. If Eisenkot leads Israel, the real economic test will not simply be: How many Palestinian workers return? The test will be broader. Will workers and goods be able to move with greater stability and predictability? Will clearance revenues become less vulnerable to repeated shocks? Will correspondent banking move from temporary extensions toward a durable arrangement? Will surplus shekels be managed through a workable mechanism? And will Palestinian businesses be able to plan for investment instead of repeatedly planning around the next crisis?
There is currently no evidence that Eisenkot has committed himself to all of these changes. His clearest public position concerns Palestinian workers. On clearance revenues, correspondent banking, surplus shekels, checkpoints, and crossings, there is no published comprehensive program from him so far. And even if he becomes prime minister, implementation would not depend on him alone. It would also depend on coalition partners, government ministries, security institutions, the Bank of Israel, and other relevant actors. But these issues provide a realistic and measurable standard against which any future policy can be assessed. If preventing the collapse of the Palestinian Authority remains part of Eisenkot’s strategic thinking, the test should not be limited to preventing the final moment of collapse. It should also ask whether policy allows Palestinian institutions, the economy, and the society around them to function before reaching that point.
Economic stability is not a substitute for political rights or for a political settlement. PCPO polling reflects that distinction. 83.8% said Palestinian economic stability could contribute to greater political and security stability in the region.
Economic stability, then, should be understood as one element of a more sustainable future – not as a replacement for the fundamental political questions that remain unresolved. For Palestinians, however, the meaning of change will ultimately be far less abstract. It will be seen when a worker can reach his job, a public employee can rely on a salary, a trader
can cross the bridge and transfer money, a company can deliver goods on a predictable schedule, a bank can settle its payments, and a family or a young person can plan for tomorrow with less fear that another economic bottleneck will suddenly close the road ahead.
The article is also available online in both English and Arabic at the following link.
Dr. Nabil Kukali is a Palestinian public opinion research expert and the founder and president of the Palestinian Center for Public Opinion (PCPO). He has more than three decades of experience in survey design, analyzing public attitudes, and conducting social, political, and economic research in Palestine and the wider region. PCPO will be engaging in Diaspora Circles and connected activities with Generation1.ca.
