On both sides of the pond, in London and Washington, policymakers are struggling to weather their budget crises. Therefore, it may astound American and British taxpayers that the precious dollars and pounds they deploy in Israel and the Occupied Territories fungibly funds terrorism.

The instrument of this funding is US and UK programs of aid paid to the Palestinian Authority. This astonishing financial dynamic is known to most Israeli leaders and western journalists in Israel. But it is still a shock to most in Congress and many in Britain's Parliament, who are unaware that money going to the Palestinian Authority is regularly diverted to a program that systematically rewards convicted prisoners with generous salaries. These transactions in fact violate American and British laws that prohibit US funding from benefiting terrorists. More than that, they could be seen as incentivizing murder and terror against innocent civilians.

Here's how the system works. When a Palestinian is convicted of an act of terror against the Israeli government or innocent civilians, such as a bombing or a murder, that convicted terrorist automatically receives a generous salary from the Palestinian Authority. The salary is specified by the Palestinian "law of the prisoner" and administered by the PA's Ministry of Prisoner Affairs. A Palestinian watchdog group, the Prisoners Club, ensures the PA's compliance with the law and pushes for payments as a prioritized expenditure. This means that even during frequent budget shortfalls and financial crisis, the PA PA pays the prisoners' salaries first and foremost – before other fiscal obligations.

The law of the prisoner narrowly delineates just who is entitled to receive an official salary. In a recent interview, Ministry of Prisoners spokesman Amr Nasser read aloud that definition:

A detainee is each and every person who is in an Occupation prison based on his or her participation in the resistance to Occupation.

This means crimes against Israel or Israelis. Nasser was careful to explain:

It does not include common-law thieves and burglars. They are not included and are not part of the mandate of the ministry.

Under a sliding scale, carefully articulated in the law of the prisoner, the more serious the act of terrorism, the longer the prison sentence, and consequently, the higher the salary. Incarceration for up to three years fetches a salary of almost $400 per month. Prisoners behind bars for between three and five years will be paid about $560 monthly – a compensation level already higher than that for many ordinary West Bank jobs. Sentences of ten to 15 years fetch salaries of about $1,690 per month. Still worse acts of terrorism against civilians, punished with sentences between 15 and 20 years, earn almost $2,000 per month.

These are the best salaries in the Palestinian territories. The Arabic word ratib, meaning "salary", is the official term for this compensation. The law ensures the greatest financial reward for the most egregious acts of terrorism.

In the Palestinian community, the salaries are no secret; they are publicly hailed in public speeches and special TV reports. The New York Times and the Times of Israel have both mentioned the mechanism in passing. Only British and American legislators seem to be uninformed about the payments.

From time to time, the salaries are augmented with special additional financial incentives. For example, in 2009, a $150-per-prisoner bonus was approved to mark the religious holiday of Eid al-Adha. President Mahmoud Abbas also directed that an extra $190 "be added to the stipends given to Palestinians affiliated with PLO factions in Israeli prisons this month". Reporting on the additional emolument, the Palestinian news service Ma'an explained:

Each PLO-affiliated prisoner [already] receives [a special allocation of] $238 per month, plus an extra $71 if they are married, and an extra $12 for each child. The stipend is paid by the Palestine Liberation Organization (PLO) each month.

About 6% of the Palestinian budget is diverted to prisoner salaries. All this money comes from so-called "donor countries" such as the United States, Great Britain, Norway, and Denmark. Palestinian officials have reacted with defiance to any foreign governmental effort to end the salaries. Deputy Minister of Prisoners Affairs Ziyad Abu Ein declared to satellite TV network Hona Al-Quds:

If the financial assistance and support to the PA are stopped, the [payment of] salaries (Rawatib) and allowances (Mukhassasat) to Palestinian prisoners will not be stopped, whatever the cost may be. The prisoners are our joy. We will sacrifice everything for them and continue to provide for their families.

Many believe foreign aid is an investment in peace between the warring parties in Israel and disputed lands. That investment might have a greater chance for success if terrorism did not pay as well as it does – with taxpayers footing the bill.

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