In a rare glimmer of good news from the vexed Israeli-Palestinian conflict, the Israeli government has announced it will turn tax revenues over to the Palestinian Authority, allowing the Palestinians to meet payroll and cover some other basic expenses. Holding the payments back was Israel’s response to the Palestinian quest for statehood at the UN.The financial sanctions were a telling blow. The key difference between states and other entities is sovereignty: the ability and power to manage their own affairs. The Palestinians do not collect their own taxes; handouts from donors and the delivery of tax receipts from Israel keep the Palestinian Authority alive. An authority that must beg for the money that keeps it alive may call itself a state, and may for political reasons be called a state by other people, but as a matter of fact and truth it is a dependency rather than a country.By withholding money from the PA, Israel was delivering a pointed reminder that the Palestinians can only have a state as a result of Israeli actions. This is an unpleasant reality for Palestinians and understandably so, but there is no way to actual as opposed to nominal statehood except through negotiations with the neighbors. The reminder was particularly pointed because so many Palestinians depend on the Palestinian Authority for their salaries and the services that make life work. When the PA runs out of money, it cannot deliver, and the political crisis becomes a personal economic crisis throughout the West Bank.In a further twist of the knife, a number of Arab countries are behind in the generous pledges they have made to the Palestinians in the past. The Arabs could have chosen to help Fatah out merely by honoring past pledges; they chose not to do so, demonstrating yet again that for all the talk and all the posturing few Arab governments are genuinely committed to helping Palestinians on the ground.Having made its point about the limits on Palestinian independence and self reliance, it was not sensible or decent for Israel to press the point too far. The Israeli government and the Palestinian Authority may not like each other or trust each other, but they need each other. Israel does not need anarchy and chaos on its frontiers. And it does not need to weaken Fatah, leaving a free field for Hamas. Nor does Israel need the bad publicity that would result when the financial sanctions closed schools and cut other essential services.The transfer of money is not a sign that things are getting better; the Israeli-Palestinian peace process is still becalmed. The early failures of the Obama administration in the region have poisoned the well for now and there is little prospect for a relaunch anytime soon. But if things aren’t getting better, for now they are not getting worse. We must sometimes be grateful for small mercies.