Supreme Court clears path to $655 million seizure as West Bank braces for fiscal reckoning

The West Bank is crumbling and the US Supreme Court just landed a huge financial blow to their crumbling financial system. The US Supreme Court is advancing a $655.5 million judgment tied to a string of deadly attacks carried out during the Second Intifada. The ruling, issued Monday by Justice Sonia Sotomayor without explanation or referral to the full court, leaves the Palestine Liberation Organization and the Palestinian Authority on the hook for a debt that dates back more than two decades, even as officials in Ramallah warn that collecting it now could tip an already fragile economy into collapse. What looks, on its face, like a routine procedural denial is really the latest chapter in a two-decade legal war over who pays when a government-adjacent body is found responsible for financing violence, and the answer, at least for now, is that the bill has come due.

Key points:

Justice Sonia Sotomayor denied an emergency application from the PA and PLO to pause enforcement of the $655.5 million judgment while they pursue further appeals.

The underlying case traces back to a 2015 jury verdict of $218.5 million, automatically tripled under the Anti-Terrorism Act.

A 2019 law, the Promoting Security and Justice for Victims of Terrorism Act, was designed to give US courts jurisdiction over the PA and PLO.

The Supreme Court unanimously upheld that law in June 2025 in Fuld v. Palestine Liberation Organization, clearing the way for the Second Circuit to revive the judgment in March 2026.

The PA and PLO argue the money judgment became a legal nullity once earlier appeals were exhausted in 2018.

Palestinian officials warn that paying out now would gut public safety, health care, education and infrastructure services in the West Bank.

The ruling arrives as Israel continues withholding tax revenue it collects on the PA's behalf, deepening an existing fiscal crisis.

Who are the PLO and PA, and what are they fighting to avoid

The Palestine Liberation Organization was founded in 1964 as an umbrella political and, at times, paramilitary movement representing Palestinian national aspirations, and it later became the internationally recognized diplomatic voice for Palestinians in negotiations with Israel. The Palestinian Authority, created under the 1990s Oslo Accords, is the interim self-governing body that administers civil affairs in parts of the West Bank, funding police, hospitals, schools and municipal services for millions of residents. The two entities are legally and financially intertwined, which is why a judgment against one lands squarely on the other's books.

The case itself, formally litigated for years under the name Sokolow, was brought by American families whose relatives were killed or wounded in a string of shootings and bombings in the Jerusalem area between 2002 and 2004, during the Second Intifada, a period of intense Palestinian uprising against Israeli occupation that produced years of attacks on soldiers and civilians alike. A New York jury found the PA and PLO civilly liable after a seven-week trial in 2015, awarding $218.5 million, a figure that ballooned to $655.5 million once tripled under federal anti-terrorism law. The Second Circuit threw out that verdict in 2016, ruling that American courts lacked jurisdiction over the Palestinian entities, and the Supreme Court declined to revisit the question in 2018, seemingly closing the book on the case.

A revived judgment and a fiscal crisis colliding

Congress reopened the door in 2019, passing the Promoting Security and Justice for Victims of Terrorism Act, a law crafted to establish jurisdiction over the PA and PLO whenever they engage in certain US-linked activities or make payments to individuals who attack Americans, a practice critics have long labeled a stipend system for the families of those convicted of terrorism. The Second Circuit initially found that law unconstitutional on due process grounds, but the Supreme Court unanimously reversed that finding in June 2025 in Fuld v. Palestine Liberation Organization, and the Second Circuit responded in March 2026 by reinstating the original judgment in full.

That set the stage for the latest fight. In their emergency filing, the PA and PLO argued the judgment had become a legal nullity, writing that it was rendered "absolutely void" once earlier appeals concluded in 2018, and warning that immediate enforcement would devastate remaining public safety, security, the judicial system, health care, public schools, public works, communications, transportation and reconstruction. Nitsana Darshan-Leitner, president of the Shurat HaDin-Israel Law Center, which represented plaintiffs in related litigation, told The Jerusalem Post that the practical meaning of the ruling is that the Palestinian Authority will be required to pay $655 million to the victims of terrorism.

The timing compounds an already dire financial picture. Israel has been withholding billions in tax revenue it collects on the PA's behalf, revenue that ordinarily makes up roughly 60% of the PA's budget, on the grounds that some of it has funded payments tied to attackers and their families. Palestinian Finance Minister Estephan Salameh described the withholding as a financial siege earlier this year, saying it would make this the most financially difficult year since the PA's founding in the early 1990s. With Gaza still reeling from Israeli airstrikes and a ground campaign launched after Hamas' October 2023 attack, and the West Bank now facing the prospect of a $655 million judgment coming due, the question hanging over the region is not just who owes what, but whether the institutions meant to keep basic services running can survive paying it.

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