MADRID, Sept 27, 2025 (BSS/AFP) - Twelve countries including Britain, France, Japan, Saudi Arabia and Spain on Friday announced a new coalition to financially support the cash-strapped Palestinian Authority as Israel withholds its tax revenues.

The Emergency Coalition for the Financial Sustainability of the Palestinian Authority "was established in response to the urgent and unprecedented financial crisis" confronting the PA, the Spanish foreign ministry said in a statement.

It aims to stabilise the Ramallah-based body's finances, preserve its ability to govern, provide essential services and maintain security, "all of which are indispensable to regional stability and to preserving the two-state solution", the statement added.

The statement mentioned past "significant financial contributions" and pledges of "sustained support" from the coalition -- which also includes Belgium, Denmark, Iceland, Ireland, Norway, Slovenia and Switzerland -- without specifying the quantities or countries.

Palestinian Prime Minister Mohammad Mustafa's office has said donors pledged at least $170 million to finance the PA.

Saudi Arabia will provide $90 million, state media quoted Foreign Minister Prince Faisal bin Farhan as saying late on Thursday.

Acknowledging the insufficiency of short-term aid, Friday's statement said the countries would work with international financial institutions and partners "to mobilise resources, support ongoing governance and economic reforms, and ensure full transparency and accountability".

Israel collects tax revenues on the PA's behalf under the 1994 Paris Protocol.

After the outbreak of the Gaza war in October 2023, Israel has withheld tax revenue to the PA, which says basic services such as health and education have deteriorated and that poverty has spiked.

Israel says that some of the money it withholds is meant to pay back costs such as electricity it sells to Palestinians.

But far-right Finance Minister Bezalel Smotrich, who stopped all payments to the PA four months ago, has said he would pursue the collapse of the Palestinian government through "economic strangulation" to prevent the creation of a Palestinian state.

"The ministers demand that Israel immediately release all Palestinian clearance revenues and cease any measures that obstruct or weaken the Palestinian Authority or risk its collapse," the Spanish statement added.

The announcement came as traditional allies of Israel including France and Britain were among a string of countries that recognised a Palestinian state at this week's UN General Assembly in New York.