JERUSALEM, Aug. 18 (JTA) — Israeli-Palestinian relations showed hints of a thaw this week after Israel partially relaxed some of its sanctions on the self-rule areas. Israel announced Monday that it would transfer 30 percent of the tax revenues it has withheld from the Palestinian Authority since July 30, when two suicide bombers killed 14 Israelis in Jerusalem’s Mahane Yehuda market. Prime Minister Benjamin Netanyahu’s office said in a statement that the premier had made the decision to release some $12 million in tax revenues. It said the move came because of “partial cooperation” by the Palestinian Authority into the investigation of last month’s attack and because of the authority’s swift capture of three Palestinians who admitted to killing Jerusalem taxi driver Shmuel Ben Baruch over the weekend. Palestinian Authority officials welcomed the move as a “positive step,” but protested that the entire sum was not being handed over. They claim that Israel owes the authority $70 million in tax revenues and that the failure to transfer the entire sum was preventing the authority from paying salaries to its employees. Netanyahu spokesman Shai Bazak said that although Israel was turning over some of the revenues, it still expected the Palestinian Authority to crack down on terrorism. He added that the sanctions Israel imposed in the wake of the attack, including a full closure on the territories, would be eased relative to the authority’s commitment to arrest terrorists. Palestinian officials countered over the weekend that they were considering a boycott of all Israeli goods. Arafat was quoted Sunday as saying the Palestinians were prepared to face an ongoing closure of the territories. “We know how to face it as Palestinian people,” he said. Earlier he said the Palestinian Authority would not accept “dictates” from Israel and would not carry out mass arrests of Islamic militants. The Palestinian leader also called for “national unity” talks with militant groups in the self-rule areas to prepare a united front against Israel. During his latest shuttle mission to the region last week, U.S. Middle East envoy Dennis Ross succeeded in convincing Israeli and Palestinian security officials to resume meetings aimed at re- establishing security cooperation as long as CIA officials were present. Arafat cited the arrests of the three Palestinians as proof that the Palestinian Authority was working with Israeli security forces. At a three-way meeting Sunday in the West Bank town of Ramallah, West Bank Security Chief Jibril Rajoub gave his Israeli counterparts some explosives the Palestinians found last month in a bomb factory in the town of Beit Sahur in the West Bank. Israeli officials hope the explosives will help with their investigation of the July 30 attack. The turning over of the explosives contributed to Netanyahu’s decision to hand over some of the tax revenues to the Palestinians. In a related development, the head of Israel’s Shin Bet domestic security service, Ami Ayalon, was in London to probe claims that the attack had been carried out by Arab militants based in Britain, according to news reports. Israeli officials would not comment on the published claims. While Israeli officials praised the Palestinian cooperation that led to the swift capture of the taxi driver’s murderers, Netanyahu spokesman David Bar-Illan said the arrests were “not the same as destroying the infrastructure of the terrorist organizations” in the West Bank and Gaza Strip. A Palestinian military court sentenced the three on Saturday, hours after the taxi driver’s bloodied body was found in an irrigation well in Jericho. Two of the men, aged 19 and 20, received life in prison with hard labor for premeditated murder. The third, 17, received 15 years in prison for complicity in the crime. The three said they had only intended to steal the car, but killed Ben Baruch when he tried to run away. Ben Baruch was married with four children. His wife, Betty, said he had been sympathetic to the Palestinian cause. Ben Baruch had been reported missing since Aug. 14, when he picked up the three Palestinians near the Arab neighborhood of Jebel Mukabir in southeastern Jerusalem. The three told Ben Baruch they worked at a nearby car wash and asked him to drive them to the West Bank town of Jericho, according to Israeli media reports. Palestinian police found Ben Baruch’s body Saturday morning. They notified Israeli officials, who later recovered the body. Palestinian police said his head had been smashed with a stone and his neck stabbed with a screwdriver. Ben Baruch’s bloodstained taxi was found last Friday night in a Palestinian refugee camp outside Jericho. One of the Palestinians arrested said he had sold the taxi to a chop shop in the area for $2,000.