The move has sparked outrage among Palestinian citizens of Israel, who accuse him of withholding funds from their communities and violating international law.
According to the Israeli broadcaster Kan, Smotrich and his party colleague Orit Strock, the settlements minister, intend to bring the scheme for a cabinet decision at the coming weekly meeting on Sunday. The money will come from the reduction of budgets at other ministries, including $35 million from the education ministry and $53.5 million from the interior ministry.
Smotrich, who is a member of the far-right Religious Zionism party, said his plan will boost the economy and fight crime affecting Palestinian citizens of Israel. He also said he will establish a team to ensure the funds will not be misused.
However, his decision has been condemned by Palestinian leaders and civil society groups, who say he is discriminating against them and supporting the expansion of illegal settlements that undermine the prospects of a two-state solution.
The Abraham Initiatives, which campaigns for equal social and political rights among Jews and Arabs, said in a statement that the government is trying to make the lives of Arab citizens “intolerable”.
“Instead of transferring budgets to Israeli citizens who live within the borders of the country and desperately need budgets to reduce the gaps, the finance minister sees himself as the finance minister of the settlements only,” the group said.
Palestinian municipalities have called for a general strike next Monday to protest against Smotrich’s actions, and have threatened to not open schools in September. The funds, which were approved by the previous government that included the Islamist Ra’am party, were aimed at improving infrastructure, education, health and security in Arab communities.
Smotrich’s plan also comes amid growing pressure from the United States and other international actors to halt settlement expansion in the West Bank, which is considered illegal under international law. Nearly 700,000 settlers live in more than 250 settlements and outposts across the West Bank and East Jerusalem, which were captured by Israel in 1967.
Last month, Israel’s far-right government announced plans to approve thousands of building permits for illegal settlements in the West Bank, despite US President Joe Biden’s call for a freeze. The government also amended laws that had previously prohibited settlers from returning to four settlements that were evacuated in 2005: Homesh, Sa-Nur, Kadim and Ganim.
The US State Department said it was “deeply troubled” by Israel’s moves, and described them as an “obstacle to peace”. The European Union, the United Nations and several Arab countries also expressed their concern and urged Israel to reverse its policies.
The Middle East Eye, a news website that covers the region, reported that Smotrich’s plan is part of his agenda to annex parts of the West Bank and establish a Jewish state based on religious law. Smotrich has previously called for expelling Palestinians who do not accept Israeli sovereignty, and has opposed any negotiations with them.
The Times of Israel, a pro-Israeli newspaper, reported that Smotrich’s plan is likely to face legal challenges, as there are complications with transferring funds to specific localities so close to a vote. Israel is set to hold nationwide mayoral elections in October, and some observers say Smotrich is trying to appeal to his right-wing base.