Israel’s prime minister has intervened to approve water links to the newly constructed Palestinian city of Rawabi in the West Bank as the showdown spilled into upcoming election. (Courtesy of Bayti Real Estate Investment Co.)

Prime Minister Benjamin Netanyahu has intervened to allow the newly constructed Palestinian city of Rawabi in the West Bank to connect to Israeli-controlled water sources, Israeli senior officials said Friday.

The $1 billion planned community of Rawabi, hailed as a model city in the West Bank, has seen its grand opening delayed for months by Israel’s refusal to provide water.

Rawabi became embroiled in Israeli politics leading up to the March 17 elections — and perhaps became even an embarrassment for Netanyahu before his trip to Washington to address a joint session of Congress on Tuesday.

[Read: Palestinian city has condos, mall and sports club — but no water]

In addition to the water war in Rawabi, Israeli authorities have pressed the Palestinians hard on other fronts in recent months.

The city of Rawabi in the West Bank has a 12,000-seat Romanesque theater, a shopping mall, restaurants but no water. The homes in this mountaintop city sit empty as the Israeli government has refused to allow the city to be linked to the water system. (Anne-Marie O'Connor and Divya Jeswani Verma/The Washington Post)

The Israel Electric Co. began to strategically cut off power to the West Bank cities of Nablus and Jenin this week — once for 45 minutes, once for an hour — to force the Palestinian government to pay its electricity bills, now deep in arrears.

To protest the Palestinian Authority’s move this year to join the International Criminal Court in The Hague, Israel has also withheld for three months the transfer of $381 million in custom duties Israel collects on Palestinians’ behalf.

That money is used to pay Palestinian government workers, including security and police forces­. Palestinian workers have seen their salaries reduced by 40 percent.

U.S. Secretary of State John F. Kerry recently warned that the Palestinian Authority could collapse, which would throw the West Bank into turmoil.

[View: A Palestinian city caught in conflict]

Netanyahu’s office proposed garnisheeing $75 million from the customs duties to pay the Palestinian electric bill. The Israel Electric Co. agreed, according to senior Israeli officials who briefed Israeli reporters late Thursday and foreign reporters Friday on the condition of anonymity.

Israeli electricity providers say they are owed a total of $485 million.


Mohammad Mustafa, the Palestinian Authority economy minister, said all three actions — withholding of customs duties, water for Rawabi and electricity for Jenin and Nablus — were “unilateral acts, made illegally, and designed by the Israeli government to punish the Palestinians.”

But Mustafa applauded the release of water for Rawabi.

Israeli officials declined to describe the details of the water deal, saying only that “understandings were reached for providing water to Rawabi.”

Rawabi’s developer, Bashar Masri, expressed relief at the water deal and said he had received assurances Friday that it would go forward.

“For the first time I can go into a meeting and discuss the issues without the shadow of the water being approved,” he said in a telephone interview from London, where he was attending meetings about job creation and funding for further Rawabi construction.

Builders were ready to hand over the keys to 450 buyers almost a year ago when the Israeli government began to stall on the water permit.

Israeli military permission to turn on the tap in January was blocked by Israel’s minister of national infrastructures, energy and water resources, Silvan Shalom, a lawmaker who has come under pressure from right-wing pro-settlement activists who oppose Rawabi.

The water holdup was a high-profile setback for the biggest and, some say, most hopeful development project in the West Bank.

Thousands of visitors — including Kerry and U.N. Secretary General Ban Ki-moon — have visited over the years to see Masri unveil each phase of what Time magazine called “a shining city on a hill.”

Behind the scenes, there was growing concern in the Israeli defense establishment that the tensions could have security implications in the West Bank, where the Palestinian Authority was threatening to cut off security cooperation over the withholding of customs revenue and electricity.

Jewish leaders in Washington also voiced concern on the Rawabi issue, just a few days before Netanyahu’s address to U.S. lawmakers at the invitation of Speaker of the House John A. Boehner (R-Ohio).

On Thursday, State Department spokeswoman Jen Psaki was asked about the reaction to hooking up Rawabi to water, and the use of frozen Palestinian Authority tax funds to pay part of its tax bill and ensure uninterrupted electricity.

“I think we’d certainly see that as a positive step,” Psaki said.

Israeli Maj. Gen. Yoav Mordechai is expected to provide the appropriate documents to proceed with the water connections next week.

“Now we can conclude all the issues that have been held up until we get the water,” Masri said.