Is it permissible to pay Zakat to an uncle residing in occupied Palestine, who is in distress due to his wife’s illness, and owns lands that are expected to generate substantial wealth for him if he sells them?

It is not permissible to give Zakat (definition) to a wealthy uncle who possesses vast amounts of money. However, it is permissible to give it to his poor wife who is in need of treatment, provided that the Zakat is given into her possession or the possession of her representative, not her husband. After that, she may dispose of it for her treatment or give it to whoever treats her.