Home World Why Netanyahu helped fund Hamas and how that backfired for Israel

Why Netanyahu helped fund Hamas and how that backfired for Israel

by Hataf Finance
8 minutes read

Israel has pledged to destroy Hamas. It is, however, ironical that Israel’s governments under Prime Minister Benjamin Netanyahu consciously channelised funds to Hamas and helped it gain the strength and power that it has today. But why did Israel do so and how did its calculations go awry?

Benjamin Netanyahu’s government worked with the singular purpose of trying to prevent the formation of a Palestinian state, according to experts. It also sought to buy peace by giving Gaza residents a glimpse of a better life by funneling money and providing work permits.

The issue of funneling “Qatari money” to Hamas by the Israeli government was mentioned in public by Saudi Arabia’s former intelligence chief, Prince Turki al-Faisal, in an address on October 20. Al-Faisal’s remarks came after Hamas terrorists on October 7 butchered over a thousand Israelis and took over 200 hostages.


Al-Faisal’s statement surprised many, as people couldn’t make sense of the contradiction – why would Israel funnel funds to Hamas in the first place?

If Israel didn’t directly create a Frankenstein’s monster, it, for sure, helped nourish it.


That the Netanyahu government has been working against the formation of an independent Palestinian state has been clear for years. The creation of Israeli settlements deep within the West Bank negates the scope of a two-state solution to the Israel-Palestine conflict.

The West Bank is controlled by the Palestinian Authority, which is led by Mahmoud Abbas. Gaza, the other Palestinian territory, has been under Hamas’s control since the 2006 elections. Hamas ousted the Palestinian Authority’s Fatah in that election.

That Israeli PM Benjamin Netanyahu was against a Palestinian state was reported as recently as July by The Jerusalem Post.

“Palestinian hopes of establishing a sovereign state must be eliminated,” Netanyahu told members of a parliament committee in a closed-door meeting, according to The Jerusalem Post. Netanyahu’s remarks came as he was discussing plans for a scenario that did not have Mahmoud Abbas at the helm of the Palestinian Authority.

Netanyahu said that Israel needed the Palestinian Authority and shouldn’t let it collapse.

That is the fine balancing that Israel under Netanyahu has been trying to do for years now. Keep power centres between the West Bank and Gaza separate. Neither let the Palestinian Authority get strong nor allow it to collapse and, more importantly, prop up Hamas.

“The idea was to prevent Abbas – or anyone else in the Palestinian Authority’s West Bank government – from advancing toward the establishment of a Palestinian state,” writes journalist Tal Schneider in The Times of Israel.

“Thus, amid this bid to impair Abbas, Hamas was upgraded from a mere terror group to an organisation with which Israel held indirect negotiations via Egypt, and one that was allowed to receive infusions of cash from abroad,” writes Schneider.


Hamas has several sources of funds, but money from Qatar is the mainstay.

Gas-rich Qatar has been giving hundreds of millions of dollars in aid to Gaza residents since 2014. At one point, Qatar spent $30 million per month to help operate Gaza’s lone power plant and support needy families and officials in the Hamas-run government, according to a Reuters report from October 2023.

The Qatari money, earlier transferred via the Palestinian Authority, is now routed via Israel.

Qatar transfers the money electronically to Israel. Israeli and United Nations (UN) officials carry the cash over the border to Gaza in suitcases. “Qatari aid to the Gaza Strip is fully coordinated with Israel, the UN and the US,” Reuters quoted a Qatari government official as saying.

Needy families in Gaza then receive the cash and sign a document, a copy of which goes to Israel, Qatar and the UN.

Other than the funds funneled by Israel, Hamas uses a global financing network for support from charities and friendly nations, passing cash through Gaza tunnels or via cryptocurrencies to bypass international curbs. Iran, Israel’s bitter enemy, too funds and arms Hamas.

“Whoever is against a Palestinian state should be for transferring the funds to Gaza, because maintaining a separation between the Palestinian Authority in the West Bank and Hamas in Gaza helps prevent the establishment of a Palestinian state,” The Jerusalem Post quoted Prime Minister Netanyahu as saying in 2019.

He argued that it was better for Israel to serve as the pipeline to ensure the funds don’t go to terrorism.


Israel believed that by channeling the funds to Gaza it would cut off the Palestinian Authority and the money would go to the people, not into terror activities against it.

Israel’s other move to help people in Gaza was to offer work permits. The permits to travel to Israel for work and return at the end of the day increased to 20,000 in 2023 from around 3,000 in 2021.

Journalist Tal Schneider writes that according to Israeli officials, these work permits that “allow Gazan labourers to earn higher salaries than they would in the enclave, were a powerful tool to help preserve calm”.

Hamas was also included in discussions about increasing the number of work permits Israel granted to Gaza residents, which kept money flowing into Gaza, says Schneider.

In a recent post on X, Avi Issacharoff, Middle East commentator and ‘Fauda’ creator, highlighted how thousands of Gaza residents worked in Israel and were treated in hospitals there.

“Facts: Israel withdrew from Gaza in July 2005. Before October 7th, Gaza had an open border with Egypt for people who wanted to leave or fly. Gaza had electricity, water, fuel, food etc coming from Israel and Egypt. 19,000 people went out every day to work in Israel. Thousands of people from Gaza were treated in Israeli hospitals. That wasn’t an occupation or a siege. So stop justifying terror,” Avi Issacharoff tweeted.


But Netanyahu’s calculations would go horrifically wrong.

Hamas somehow managed to lull Israel into complacency.

In 2017, Hamas played diversionary tactics by softening its stance on Israel.

Hamas leader Khaled Meshal released the policy document in 2017, which for the first time indicated a willingness to accept a Palestinian state along with Israel, although without recognising the Jewish nation. It also said Hamas’s struggle wasn’t against Jews but against “Zionist aggressors”.

“Since 2014, Netanyahu-led governments have practically turned a blind eye to the incendiary balloons and rocket fire from Gaza,” writes Tal Schneider.

Hamas kept training its terrorists, often in plain sight, as the Israeli intelligence apparatus was led to believe that Hamas wasn’t prepared for any attack and the economic incentives to Gazans were cushioning their lives.

Hamas trained and dug a huge network of tunnels to smuggle and hide weapons even as Israel kept funneling Qatari money to Gaza and making it stronger.

“This was a mistake of epic proportions,” political scientist Ian Bremmer said on X. “Hamas was and is a terrorist organization. With critical support from Iran, from Russiaâ€æ and, before October 7, from the Israeli PM. This helps explain why so many Israelis are united not just in destroying Hamas but also in removing Netanyahu from office,” adds Bremmer.

Israeli PM Netanyahu has come under tremendous pressure and criticism after the October 7 Hamas attacks, which have claimed the lives of 1,400 Israelis and are being described as “Israel’s 9/11”. If he is being slammed for the deadly attacks at home, abroad he is facing criticism for the Gaza offensive. How Netanyahu steers his country in this moment of crisis and what stand he takes on the Palestinian statehood issue will determine the fates of both Israelis and the Palestinians.

Published On:

Nov 1, 2023

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