updated 1/19/2007 5:01:18 AM ET 2007-01-19T10:01:18

Israel freed $100 million in frozen tax funds and transferred the money to Palestinian President Mahmoud Abbas, an official in Israeli Prime Minister Ehud Olmert’s office said Friday.

The transfer, made Thursday night, gives the moderate Palestinian leader a boost ahead of crucial weekend talks in Damascus with the top Hamas leader. It is the first such Israeli payment since the militant Islamic Hamas won control of the Palestinian government last March.

The funds are part of the customs duty and value-added tax Israel collects for the Palestinian Authority under partial peace accords. Israel halted transfer of the revenues when Hamas won parliamentary elections and set up its Cabinet.

Israel, the U.S. and the European Union define Hamas as a terror group because of its suicide bombings that have killed hundreds of Israelis and its refusal to recognize the Jewish state.

Since Hamas came to power, its vital international aid has been cutoff by foreign donors because of its refusal to renounce violence. The pressure on Hamas has continued to build, as the government for months has only paid partial salaries because of a budget crunch.

The Israeli official said the money would be transferred directly to Abbas for use in humanitarian efforts and to boost his security force. The official, speaking on condition of anonymity because the decision had not yet been formally announced, said Israel was satisfied by assurances that the money would not go to the Palestinian Finance Ministry, which is controlled by Hamas.

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