The West Bank's Palestinian Authority on the Brink of Collapse

Jul 07, 2026

The West Bank's government is running out of money and could collapse, which would be bad for Palestinians and could spark chaos right on Israel's border.

  • The Palestinian Authority, which runs the West Bank, is nearly broke, and its economy has shrunk sharply since late 2023 with unemployment above 30%.
  • Israel collects taxes on the PA's behalf and is supposed to hand the money over, but the far-right finance minister Smotrich cut off the transfers over a year ago and hasn't sent a cent.
  • Hardliners like Smotrich want the PA gone so Israel can annex most of the West Bank, while even Netanyahu and Israel's own security services fear a collapse would unleash chaos.
  • The PA pays 30,000 armed security men who help keep order; if their pay dries up, Israel could face an armed force on its doorstep.
  • Arab and Western donors have pulled back too, fed up with the PA's deep corruption and its 90-year-old leader Abbas, who hasn't held an election in 20 years.

Outlook: The PA will likely keep limping along on emergency scraps, but nobody has a plan for what happens if it finally gives out.

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