Israel agrees to tax plan

Occupied Jerusalem: Israel has relented to international pressure and agreed to release millions of dollars in tax revenues owed to the Palestinians.

The government is also considering loosening restrictions on the transportation of goods between Israel and the Gaza Strip.

Israel has been holding onto $55m in tax and customs revenues it collects on behalf of the Palestinians since the Hamas government took power in January.

The withholding of those funds has contributed to bringing the Palestinian Authority to the brink of collapse.

Israeli Foreign Minister Tzipi Livni said they were willing to release the revenues "for humanitarian needs" but not to pay the salaries of Palestinian government officials.

The news follows an announcement on Wednesday that the US and some European countries had agreed to provide funding for humanitarian aid in Palestine.