Peres holds post elections talks to designate Israel's PM

Israel will give Palestinian President Mahmoud Abbas's administration around $100 million in tax revenues that had been withheld in retaliation for his statehood bid in the United Nations, Israeli officials said on Wednesday.              

They described the handover as a one-time deal, signaling rightist Israeli Prime Minister Benjamin Netanyahu had not formally scrapped sanctions that have hurt the Palestinian Authority in the occupied West Bank and worried world powers.                  

But the decision follows surprise setbacks for Netanyahu in a national election this month that, while giving him enough of a lead to head the next Israeli government, also set the stage for more moderate statecraft by boosting centrist challengers whom he must now consider as coalition partners.                   

Under interim peace deals, Israel collects some $100 million a month in duties on behalf of the Palestinian Authority, money Abbas badly needs to pay public sector salaries. It began withholding the funds after Abbas, sidestepping stalled diplomacy, secured a Palestinian status upgrade at the United Nations in November.

Earlier on Tuesday, Israel's president announced that he is ready to start the process toward forming the country's new governing coalition following last week's parliamentary election.     

A statement from the office of Shimon Peres said the president will meet representatives from all parties elected to parliament. After that, he will choose a prime minister-designate to form a new coalition.     

That's likely to be the current officeholder, Benjamin Netanyahu. His joint list is the largest party in the new parliament.     

Meetings began on Wednesday after official results were delivered. Peres is set to meet Netanyahu and newcomer Yair Lapid, whose party finished second. Meetings with smaller parties are scheduled for Thursday.

The premier-designate can get two three-week periods for negotiations before presenting his coalition to the parliament for approval.

REUTERS/AP