Israel and the Palestinian Authority have reached a compromise agreement that will effectively end the crisis regarding the tax revenues that Israel has been withholding from the PA, as well as the crisis regarding Palestinian debt to the Israel Electric Company, Haaretz learned.

The Israeli Coordinator of Government Activities in the Territories, Maj. Gen. Yoav Mordechai, met on Friday with his Palestinian Authority counterpart.

Their meeting resulted in the Palestinians agreeing to receive the tax revenue withheld by Israel from December to February as a result of the Palestinian effort to join the International Criminal Court in The Hague.

The Palestinians also agreed to a "major offsetting" of roughly half a billion shekels that Israel withheld from tax revenues collected between December and February, meant primarily to repay debts to the Israel Electric Company.

Also, according to the understanding reached between the two sides, Israel will significantly reduce the amount withheld from March and April tax revenues to offset the Palestinian debt.

Going forward, Israeli and Palestinian representatives will continue to discuss the remaining debt as well as both sides' obligations.