Israel transfered $100 million in frozen tax funds to Palestinian Authority Chairman Mahmoud Abbas as promised on Thursday, an official in Prime Minister Ehud Olmert's office said Friday.

"The money has been transferred," said the official. The funds are part of the customs duties and Value-Added Tax that Israel collects on behalf of the Palestinian Authority.

The prime minister agreed to transfer the funds during his meeting with Abbas last month, as part of a series of steps designed to bolster the PA chairman.

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The transfer gives Abbas a boost ahead of crucial weekend talks in Damascus with the head of Hamas' political bureau, Khaled Meshal, and is the first such Israeli payment since Hamas won control of the Palestinian government last March.

Following Hamas' victory in the parliamentary elections, Olmert's government decided to halt the tax revenue transfers, estimated at $50 million to $60 million per month.

The 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.

A senior aide to Abbas, Saeb Erekat, said the funds would be channeled towards humanitarian projects and the private sector, but declined to say whether any would go toward boosting Abbas' security.

While Erekat welcomed the payment, he said it still only represented about 25 percent of Palestinian revenues Israel is holding. "We need it badly, and we consider this a step in the right direction, hoping that the whole lot of money withheld will be transferred to the Palestinian Authority," he said.

Israel, the United States and the European Union define Hamas as a terror group because it is sworn to the destruction of Israel and is responsible for the deaths of hundreds of Israelis. The international community has frozen foreign aid that has kept the Palestinian Authority afloat since it was created in 1994.

Israeli officials, speaking on condition of anonymity, have previously said the money would be earmarked for humanitarian needs and a U.S.-backed program to strengthen Abbas' presidential guard.