Yellen Urges Israel to Restore Economic Ties to West Bank

Treasury Secretary Janet L. Yellen said on Tuesday that she had personally urged Prime Minister Benjamin Netanyahu of Israel to increase commercial engagement with the West Bank, contending that doing so was important for the economic welfare of both Israelis and Palestinians.

Ms. Yellen’s plea was outlined in a letter that she sent to Mr. Netanyahu on Sunday. It represented her most explicit public expression of concern about the economic consequences of the war between Israel and Hamas. In the letter, Ms. Yellen said, she warned about the consequences of the erosion of basic services in the West Bank and called for Israel to reinstate work permits for Palestinians and reduce barriers to commerce within the West Bank.

“These actions are vital for the economic well-being of Palestinians and Israelis alike,” Ms. Yellen said at a news conference in Brazil ahead of a gathering of finance ministers from the Group of 20 nations.

The letter came as the cabinet of the Palestinian Authority, which administers part of the Israeli-occupied West Bank, submitted its resignation on Monday in hopes that it could overhaul itself in a way that would enable it to potentially take over the administration of Gaza after the war there ends. Negotiations between Israel and Hamas are also resuming in Qatar this week as mediators from that nation, along with the United State and Egypt, work on a deal to release some hostages being held by Hamas in Gaza in exchange for Israel’s agreeing to a temporary cease-fire.

Senior Biden administration officials have been trying to mediate a resolution to the conflict in Gaza, which health authorities there say has killed approximately 29,000 Palestinians. Ms. Yellen has largely been focused on tracking the economic implications of the war and managing the sanctions that the Treasury Department has imposed on Hamas and those who are involved in its network of finances.

While the Biden administration has been concerned about the humanitarian crisis unfolding in Gaza, it is increasingly worried that economic unrest in the West Bank could fuel violence and further deteriorate living standards there. The war has already taken a toll on Israel’s economy, which contracted by nearly 20 percent in the fourth quarter of last year.