Israeli finance minister to renew funds to Arab communities after backlash

FILE PHOTO: Israeli Finance Minister Bezalel Smotrich speaks to the media in Jerusalem

JERUSALEM (Reuters) - Israeli Finance Minister Bezalel Smotrich said on Monday his ministry would unblock funds for Arab communities that he suspended saying the money was fuelling crime, triggering outrage from Arab mayors and some Arab and Jewish lawmakers.

Smotrich, a member of Prime Minister Benjamin Netanyahu's nationalist-religious government, said this month that some of the budget funds meant for Arab local councils were a political pay-off by the previous cabinet that could end up in the hands of "criminals and terrorists".

Arab councils held a strike last week in protest and community leaders demonstrated outside government offices. The National Committee of Arab Local Councils in Israel accused Smotrich of racism.

In a statement on Monday, Smotrich appeared to reverse course and said an oversight mechanism had been created to transfer funds to the Arab communities.

"We are stopping the criminal organisations from taking over the budgets that go to the Arab authorities," Smotrich said.

Arab citizens of Israel, most descendants of Palestinians who remained in Israel after the 1948 war surrounding its creation, make up about a fifth of the country's population.

Crime in the Arab sector communities is disproportionately high to their makeup of the overall demographic.

At least 157 Arab citizens in Israel have been murdered since January, more than double the fatalities over the same period last year and the highest toll since 2014.

(Reporting by Emily Rose; Editing by Alison Williams)