Report: Western pressure halted Fayyad resignation

The United States and Europe are pushing to tamp down an internal Palestinian power struggle, Palestinian sources say.

Citing unnamed Palestinian sources, the Israeli daily Haaretz reported that a meeting scheduled for Thursday between Palestinian Prime Minister Salam Fayyad and President Mahmoud Abbas was postponed under American pressure. Fayyad was expected resign at the meeting.

The United States and the European Union wish to avoid internal power struggles within the Palestinian Authority at a time when the Americans are attempting to jumpstart peace talks between the Palestinian Authority and Israel, Haaretz reported.

“The Americans view Fayyad as having great impact on the level of donations and financial support of the Palestinian Authority,” a source said.

Over the past few weeks, already tense relations between Fayyad and Abbas have reportedly deteriorated due to major disagreements over government policy in the Palestinian Authority.

Palestinian Authority blames Gaza for deficit mess

Paying for the upkeep of the Gaza Strip while its political rival actively blocks revenues flowing back is taking its toll on the deficit-racked Palestinian Authority.

The Western-backed PA, many of whose top leaders belong to the mainstream Fatah movement, says it has poured around $7 billion into the Gaza Strip since its rival Hamas seized control in 2007, but complains that the Islamist group is stymieing its efforts to balance its books.

A barrage of mutual accusations in recent weeks has driven Hamas and Fatah ever further apart as stalled efforts at reconciliation and economic stagnation have jangled nerves on both sides.

Crippling power cuts in the small coastal enclave have only added to the acrimony and lifted the lid on often opaque Palestinian funding.

The PA says it spends $120 million a month, or more than 40 percent of its whole budget, on salaries and services in Gaza despite being driven out in a brief civil war with Hamas five years ago, anxious to show the world that despite the political divisions, the Palestinians remain one people with a single administrative core.

The PA, which continues to exercise limited self-rule in the Israeli-occupied West Bank, has never recognized Hamas’s rule in the Gaza Strip and still pays wages to former PA personnel in the enclave.

Israel maintains a tight blockade on the Gaza Strip with the help of neighboring Egypt.

“In return Hamas does not pay for any of the needs of the people in Gaza. On the contrary, it sells the medicine that we send for free, and keeps the money,” said Ahmad Assaf, a Fatah spokesperson in the West Bank.

Hamas denies this and says the PA is just funneling foreign donations ear-marked for the Palestinian people.

“Vital sectors like education and health do not get support from them … except for bits and pieces that arrive as donations from some countries,” Hamas spokesperson Sami Abu Zuhri said.

The PA, which relies overwhelmingly on foreign donor aid, mostly from the European Union, the United States and Arab nations, is facing a projected $1.3 billion deficit in 2012.

Although most Western countries shun Hamas over its refusal both to renounce violence and recognize Israel, they let the PA use their aid cash to help the Palestinians in Gaza.

The EU says it contributed 837 million euros ($1.1 billion) to the PA since 2008, 34 percent of which went to the Gaza Strip to cover civil servants’ salaries and pensions.

“According to our information, the Hamas government only pays for the salaries of their employees and for their security apparatus,” said an EU official, who declined to be named.

“We are convinced that we must continue paying this money because we know that if we didn’t the Hamas government would do nothing,” Fatah’s Assaf said.

Hamas has tried to build up its own finances by attracting funds from its own foreign allies, such as Iran, while looking to impose a taxation code of its own on trade and business within Gaza.

But analysts say it too faces a budget crunch and is far from ready to take care of Gaza’s 1.7 million-strong population, some 70 percent of whom live below the poverty line, according to U.N. statistics.

“Hamas wants to portray itself as being independent financially from the PA,” said Naser Abdelkarim, a professor of economics at Birzeit University in the West Bank.

“But that’s a myth. If the PA stops transferring money to the Strip, the reality in Gaza would deteriorate instantly.”

Hamas agrees it wouldn’t pay all the PA salaries, but says that’s because most of the people concerned don’t do any work after Fatah instructed its civil servants not to cooperate.

Another crucial issue for the PA is the taxes it should be collecting from Gaza. It says Hamas and Gazan traders systematically under-report the value of their imports to the Israeli authorities, which collect custom dues on behalf of the PA, costing the PA $400 million in “tax leakage” since 2007.

Palestinian Authority Prime Minister Salam Fayyad said Gaza raised 2 percent of all Palestinian tax returns in 2011 against 28 percent in 2005.

Hamas’s economy minister, Ala al Rafati, admitted the group was withholding some $95 million in custom tax forms that the PA needs in order to collect revenues and would continue to do so until the PA agreed to wire the money straight back to Gaza.

“These invoices have not been sent to Ramallah since the split,” al Rafati told Reuters by telephone from Gaza.

Palestinians’ long-running hope of founding a state incorporating both the West Bank and Gaza, territories divided by Israel, has often papered over feuds between rival factions.

The arguments over finances have come out into the open partly because of a fuel crisis that has left much of the enclave without power for several hours each day since early February, sparked by Egypt’s decision to clamp down on the flow of fuel smuggled into Gaza via a network of tunnels.

Critics of Hamas say it is at fault for the emergency for relying so heavily on cheap, illicit fuel, rather than working with the PA to secure alternative supplies.

The PA says it pays more than $50 million a month to an Israeli energy company that feeds power into Gaza, but Hamas refuses to hand over money from electricity bills.

“We have repeatedly asked Hamas to transfer the money they collect so that we can continue to provide them with fuel. But nothing gets sent,” said Omar Kittaneh, the head of the PA Power Authority.

The PA admits that nothing is going to change fast. As with many of the issues that bedevil Palestinian politics, the two sides are stuck in a rut.

“Contributing a large part of the PA budget to the Gaza Strip has become the status quo and this will not change any time soon,” said PA spokesman Ghassan al Khatib.

Additional reporting by Nidal al-Mughrabi in Gaza; Editing by Crispian Balmer and Sonya Hepinstall

Netanyahu, Fayyad to meet later this month

The Israeli and Palestinian prime ministers will meet later this month, officials said on Wednesday, but the rare talks may only sharpen differences that have brought peace negotiations to a standstill.

The Palestinians said they will present Benjamin Netanyahu with a letter spelling out Israel’s failure to implement a 2003 “road map” that includes a halt to settlement activity as a step towards achieving a final peace agreement.

“The real test in front of Netanyahu is to stop the settlements, after which he will find that we are ready for negotiations,” Mohammed Shtayyeh, a member of the Palestinian negotiating team, told Reuters.

“These aren’t conditions, but what we want him to say is that he’s ready to end the occupation,” he said.

An Israeli official said Netanyahu would reiterate, at the meeting with Palestinian Prime Minister Salam Fayyad, his call for peace talks to get under way without any preconditions.

U.S.-hosted peace negotiations froze in late 2010 after Netanyahu rejected Palestinian demands that he extend the 10-month partial construction freeze he had imposed at Washington’s behest to coax them into talks.

The official said Netanyahu would also repeat his demand that Palestinians recognise Israel as a Jewish state in any peace agreement – something they oppose.

Fayyad will become the highest-level Palestinian official to have met Netanyahu since the negotiations broke off.

But the talks, which officials on both sides said would be held after the Jewish holiday of Passover, ending on April 14, will not be attended by Palestinian President Mahmoud Abbas.

Nabil Shaath, a senior official in Abbas’s Fatah movement, said Israel had pushed on with settlement building and rejected negotiations for a Palestinian state based on the lines that existed before Israel captured the West Bank in 1967.

The Palestinians, on the other hand, “have done all our duties of keeping security and better governance”, Shaath said in English.

“This situation cannot lead us to a peace process,” he said. “The consequence of this letter is to put Mr Netanyahu on the spot. He has now to answer”.


An Israeli settlement watchdog said tenders had been issued to build more than 1,000 new settler homes, mostly in parts of East Jerusalem that Israel annexed as part of its capital in a move never recognised internationally.

More than 800 are planned for an area called Har Homa, whose expansion would effectively block off East Jerusalem, which the Palestinians want as their future capital, from the Palestinian city of Bethlehem in the West Bank, said Lior Amihai, spokesman for the Peace Now group.

Netanyahu has said the pre-1967 borders are indefensible for Israel and that the future of settlements, which Palestinians fear could deny them a viable state, should be decided in negotiations.

“I want to resolve the conflict with the Palestinians because I do not want a bi-national state,” Netanyahu told a news conference on Tuesday.

“Ensuring the existence of a Jewish state is not just a matter of separation, it is also a matter of security, defence and keeping our vital, national interests,” he said.

“This requires negotiations, but there is no way to conclude negotiations if you don’t start negotiations. Until this moment the Palestinians, not us, have chosen not to negotiate and I hope they change their minds in the coming months.”

Some 500,000 Israelis live in the West Bank and East Jerusalem, which are home to 2.5 million Palestinians.

Most world powers deem the Jewish settlements illegal. Israel, which cites historical and biblical links to those areas, disputes this and has said it will keep major settlement blocs under any eventual peace accord.

Additional reporting by Ali Sawafta and Noah Browning in Ramallah and Allyn Fisher-Ilan and Ori Lewis in Jerusalem; Editing by Kevin Liffey

Palestinian rivals agree to form unity government

The leaders of rival Palestinian factions Fatah and Hamas signed a deal in Qatar on Monday to form a unity government of independent technocrats for the West Bank and Gaza, headed by Palestinian Authority President Mahmoud Abbas.

The move, following the failure of exploratory Israeli-Palestinian talks aimed at reviving stalled peace negotiations, was condemned by Israel, which says the Islamist Hamas cannot be part of any peace efforts.

The accord signed by President Mahmoud Abbas and Hamas leader Khaled Meshaal is supposed to pave the way for Palestinian presidential and parliamentary election possibly later this year, and to rebuild the Hamas-ruled Gaza Strip following a 2008-2009 Israeli offensive against Hamas.

It was not known whether the deal would be implemented. No timetable was set. A reconciliation pact Fatah and Hamas struck in May 2011 has had little substantive result but both sides said they were serious about carrying out the new accord.

Abbas’ Palestinian Authority supports a negotiated peace with Israel that would give Palestinians an independent state in the Israeli-occupied West Bank and in Gaza, co-existing alongside the Jewish state.

Meshaal’s Hamas is officially sworn to the destruction of Israel but is open to an indefinite ceasefire.

Their conflicting positions have not been resolved despite the new deal, as Israeli Prime Minister Benjamin Netanyahu wasted no time in pointing out.

“Hamas is a terrorist organization which strives to destroy Israel and relies on support from Iran,” he said. “I have said many times in the past that the Palestinian Authority must choose between an alliance with Hamas and peace with Israel. Hamas and peace don’t go together.”

If Abbas implements the Doha pact, the Israeli leader added, then “he is choosing to abandon the path of peace and to choose Hamas … You cannot have it both ways.”

Palestinian political analyst Hani al Masri said: “They (Fatah and Hamas) are avoiding the main issue. They are waiting to see what the international community’s reaction will be. This leaves all the important issues unresolved.”

A diplomat in the region, who declined to named, said Hamas leaders in Gaza appeared to have been surprised by the Doha announcement and were likely to raise questions with Meshaal, who has until recently lived in exile in Damascus.

“The agreement in Doha did not have a normal birth, I mean it did not come in complete coordination within Hamas. The whole thing came as a surprise in Gaza. We have to watch whether it will work,” the diplomat said.

Meshaal took Hamas by surprise in December by announcing he would not seek to extend his leadership when an internal election is held in March. Analysts said his “resignation” was more likely to be a back-me-or-sack-me ploy to reassert his control in order to soften Hamas policies in line with Abbas.

Fatah and Hamas have been bitter rivals since the Islamist movement seized control of Gaza in a brief war in 2007 and expelled Abbas’ Fatah-led Palestinian Authority.


Monday’s deal provided for a government of independent technocrats to oversee preparations for elections later this year. A vote had been mooted in May but the Palestinian election commission says more time will be needed.

Abbas and Meshaal, who signed the deal billed as the “Doha Declaration” in the presence of Qatari Emir Sheikh Hamad bin Khalifa al-Thani, pledged to ensure quick implementation.

“We are serious, both Fatah and Hamas, in healing the wounds and ending the chapter of division and reinforcing and accomplishing reconciliation,” Meshaal said in comments televised live by Al Jazeera from Qatar.

He said Palestinians wanted to accomplish unity and move forward “to resist the enemy (Israel) and achieve our national goals.” Abbas, head of the secular Fatah movement, promised that “this effort will be implemented in the shortest time possible.”

There was no immediate comment from Israel, which has warned Abbas that turning to Hamas amounts to turning away from peace.

A senior Palestinian official said that under Monday’s agreement, Abbas would assume the role of prime minister, replacing Western-backed economist Salam Fayyad.

It was not immediately clear if Fayyad, whose dismissal was one of the main Hamas conditions for a deal, would be a member of the new government or when the cabinet would be formed.

Fayyad welcomed the accord, and was expected to remain in his post until the new government takes over.

“The prime minister saw this as a response to the aspirations of our people to restore unity to the homeland and its institutions,” said a statement issued by his office.

Ismail Haniyeh, who heads the Hamas government in Gaza, also welcomed the deal and said he was ready to help implement it.

The last presidential and parliamentary elections were held in 2006. Hamas won the parliamentary vote and briefly formed a government but it was shunned internationally and later dissolved by Abbas.

Separately, Fayyad met union leaders and employers on Monday to pursue agreement on the 2012 budget after a public outcry against austerity steps thwarted his first plan to tackle a debt crisis, prompted in part by a cut-off of U.S. aid.

Additional reporting by Nidal al-Mughrabi in Gaza, Jihan Abdalla in Ramallah, Ori Lewis in Jerusalem. Writing by Sami Aboudi; Editing by Douglas Hamilton and Mark Heinrich

Prime Minister Fayyad: ‘Unity and Non-violence’ requisites for statehood

With skepticism rife over a Fatah-Hamas rapprochement and the Hamas demand to replace him, Palestinian Prime Minister Salam Fayyad, the man credited with energizing the movement toward statehood and the man Western governments want holding the PA’s purse strings, discusses the pending issues with Friedson Friedson, President and CEO of The Media Line news agency, at his Ramallah office. Below is the first of two sessions between Prime Minister Fayyad and Ms. Friedson.

Friedson:  Mr. Prime Minister, thank you for taking the opportunity to speak with me and The Media Line.

Fayyad:  My pleasure.

Friedson:  Is there going to be a unity government comprised of Fatah and Hamas?

Fayyad:  Well, I’m hoping that as a matter of fact, sooner rather than later. We Palestinians can have – at long last – one government that is able to run the affairs of the Palestinian people both in Gaza and the West Bank. I personally view that as an essential first step toward re-establishing unity. I have always maintained that the state of Palestine which we are seeking cannot and will not happen unless our country is re-united—and one government is a key instrument of getting there. We just cannot keep going in the way we’ve been going for four years now: separated; separate governing processes; unable to get together physically; having lots of responsibilities there; wanting to discharge them more fully and adequately toward our own people. It just can’t continue. This is really most unnatural. We must see this operation come to an end.  Now, in terms of the makeup of our government, that is what has been discussed extensively in various forms of dialogue which I hope can conclude sooner rather than later. This process has been going on way too long in my humble opinion.

Friedson: Will Salam Fayyad be able to continue as prime minister if there is a unity government?

Fayyad:  You know, on the basis of what has transpired and most recent contacts especially between the two main factions, Fatah and Hamas, it is no secret that excluding me from the possibility of being the prime minister in the next government was something that was a major issue and topic of discussion and consideration in that direction. Now, I myself have always considered that this should not be an issue, and that as far as I’m concerned, I am not now and I will never be and I can never accept being in a position of even being just thought of as an obstacle in the way of getting us there, in terms of getting the county united again. And most recently and ahead of the most recent round of negotiations which took place in Cairo, and well before that, I actually called on the factions to agree on a consensus choice other than the existing prime minister—other than me—with a view to making absolutely clear that statements and speculation as to me being the obstacle or impediment were completely unfounded and that they should really be free to go ahead and do that. That really is my position. What is really important to us is to come to the point where we can have that government – one government – and immediately the important thing is to think about what that government is going to do. This government that is going to run the affairs of the Palestinian people up to the point we have elections – that’s another important issue which I think should be definitely finalized in terms of dates for elections and all because it’s really high time for our people to have the opportunity to have their say in the form of inclusive, transparent, open elections – we must be allowed to do this and we must allow our people the opportunity to do this.  It’s not going to be just basically a mere caretaker up until the election. That government should really begin to do serious work to reunite the country. It’s easy to say, “reuniting the country,” reuniting institutions and people. What that means is quite complex and requires a lot of serious effort and that government requires a lot of support in order for it to be able to do these things and for it to be able to make inroads into the reconstruction of Gaza which is overdue. So a lot of challenges; a lot of tasks and that’s what I believe we should be focused on rather than this debate which really is a bogus controversy so far as the identity of the next prime minister. I think that should be dispensed with. There are a lot of qualified people out there and all that is required is that there be agreement and consensus on one; we should move on.

Friedson:  Having said that, the word on the street is that you might run for president.

Fayyad:  I have not considered anything in politics beyond what I’m doing right now. It is a uniform point of view of anyone who has followed my career until now and what I have been doing for more than 40 years; this would not really come as a surprise. I have just described to you the complexity of the task of the government that is going to take over in the run-up to elections and I hope this is something that is not just talked about but is something that will actually happen. I say this from the point of view of somebody who knows first-hand under these difficult conditions – highly complex conditions – domestically, regionally and internationally – as well. Given all of that, you just cannot think of anything else but what you’re doing. What I am being completely focused on is to be able to continue to chart these difficult waters; build on the progress that we’ve been able to achieve in various fields of government in terms of deepening our readiness for statehood; continue to provide support for our political activity internationally. These are really difficult challenges, so, no, I have not and I will not be thinking about anything but what I’m doing.

Friedson:  Your presence has allowed Western governments to provide aid to the Palestinian Authority. So let’s just say you did leave the government as the prime minister. Won’t a sizeable amount of [international] support be placed in jeopardy?

Fayyad:  I hope not. I think over the past few years, and this probably is or should be one of the key reasons why we have this much support and international confidence, if you will. I’m really personally flattered by all of this, but at the same time I believe it’s a reflection by and large of the progress that we’ve been able to make in institutionalizing governance processes including in the important area of monitoring finances. If the donors have confidence and faith, it’s not so much, I believe, in the fact that there is x, y or z running the show now. It’s a direct consequence of them having assurance that there are mature governance processes in key areas of government including, importantly, public finance. And so therefore I hope that would not happen. This is far too much of a responsibility, a burden, for anyone to continue to think of himself as the address through which the money, assistance, aid can go only. Exclusively. And I would really regard it, to be honest with you, as a failure on my part if it ends up being the case. I shouldn’t be talking in terms that extend beyond what I consider to be new modesty, because that’s who I am. But if I would think in terms of, well with hesitation I say the word “legacy” – I would really not want it to be my legacy on whose shoulders lies the whole responsibility of being the sole address through which, in which, the international community has confidence when it comes to assisting the Palestinian people or Palestinian Authority…

Friedson:  So how do you view your legacy?

Fayyad:  It is one of institutionalizing things. It is one of basically converting all energies that we have at the individual level as well as collectively into one part of national effort that is really capable of projecting the kind of true, real, genuine readiness for the state of Palestine that is going to happen; that I really have set out from the beginning as a goal, as a compass for everything that we really do. That’s really the most important thing. So it is progress toward the goal of institutionalizing all of these processes and I believe that is what matters.

Friedson:  Mr. Prime Minister, placing your role in the next government aside, American legislators from both parties are warning that the United States cannot fund a Palestinian government that includes Hamas because it’s on the terror list. How iron-clad do you see this stipulation as being?

Fayyad:  When we talk about one government, and I mentioned among other things that number one, it is important to have that; and number two, to discuss the makeup of that government and what it should be like, it’s platform, we touched a little bit on the tasks of that government. I do not believe that our friends in Congress would disagree with what I said about the need for us to have one government. No one can because it is, for me, a straightforward point of logic for us to want to see our country re-united. On the basis of that same logic, I see no difficulty and come to the conclusion that this cannot but be the universally-shared conclusion because that state of Palestine – in order for it to happen – must have Gaza as a component. We Palestinians can’t have a state without Gaza. And to the extent that a two-state solution is not only a Palestinian interest, but a regional interest and an international interest, there cannot but be a convergence of views on the need for our country to be reunited. This said, I think it’s incumbent on us Palestinians to really try to manage our own affairs in ways that would not interfere with our capacity to interact effectively with the international community including the United States and especially the Congress of the United States. It’s incumbent upon us to really find a way. I believe the important thing – and I believe it would be really important not to get engaged in some categorization of what might happen and characterization of that government as being [a] factional government of this color or that color or the rest of it. But really to concentrate more on issues that matter maybe more on a level of priority. For example, when it comes to matters of platform – tasks for this government – would it not really be a major consideration that this government, or one of its key tasks, is to oversee the implementation and observance of a doctrine of non-violence? I believe this is a major, major task for the government…

Friedson:  Do you believe fundamentalism within Hamas can actually go beyond this?

Fayyad:  Let me tell you: What I’ve just described to you, the doctrine of non-violence, is something we attach a greatest deal of importance to. I personally believe in the immense power of non-violence. But it is generally true that this approach, this doctrine, is more broadly shared today in Palestine than at any point before. I think we should take advantage of it and try to formalize it. Therefore, I say, if you have the prospect or possibility of having a Palestinian government, a key task of which is to oversee the implementation of such an important doctrine, would not that represent a major advance or improvement relative to status quo or status quo ante? My answer is, “Yes.” It’s a major improvement relative to what we have. If we ignore other elements, would that government be ideal? I’d say, “No.” But there’s hardly an ideal government anywhere in the world for that matter. I’m someone who looks at the realm of what is possible. What is practical. What is pragmatic and how we might be able to move. A guiding principal, or litmus test, if you will, is whether or not by moving in such-and-such direction we’re not we’re paving the way toward improving the situation. Whether the day after is now going to be better than the day before. In other words, whether we’re going to be better in regards to the status quo is the yardstick by which I measure things. Are we assured that such government is going to be perfect from every other point of view?  The answer is no. But my answer is, “Let us begin. Let’s create conditions that are better tomorrow than they are today and build on that. Create a new dynamic: a Palestinian Authority that’s able to function in Gaza.” Being able to enforce, observe and implement a doctrine of non-violence throughout the occupied Palestinian territory is a major advance in being able to formalize what has now become a broadly shared conviction in this doctrine of non-violence. I believe that it is very important to formalize that and for that to become a key ingredient for the platform of the government. This is how I look at things. Now, if we don’t get that, then I myself would say that would be a case of too many missing ingredients. It will be a case of too many things that we don’t have.  So I would say it’s important for us to take note – take good note – of the opinion of the international community, but it incumbent on us, too, to explain ourselves. I believe that the international community is reasonable…

Friedson:  But if you cannot get them – Hamas – to adopt to non-violence, then what would happen?

Fayyad:  I have just described to you what I believe would be absolutely essential in terms of the platform of that government, in terms of its key tasks and responsibilities. And if that is not really agreed upon, if that doctrine of non-violence is not a key ingredient in the platform of that government, then again I say, it will be from our own point of view, a case of too many missing ingredients.

Friedson:  Hizbullah is also on the terror list and controls 21 out of 30 cabinet seats in the Lebanese government. Yet, the United States provides aid there.  Are the situations comparable? Do you see this as a reason to believe that aid will continue notwithstanding the threats to cut off support?

Fayyad:  It is way above my pay grade to engage in cross-border comparisons. I’ll just confine myself to what is possible, reasonable, do-able on our side; and I just described to you, Felice, what is our point of view; what I believe is absolutely essential from our point of view relative to our own objective. Basic and most fundamental of our objectives – what is that? To have a state of our own. What does that mean and what does it require? It requires functional security. Functionality of security requires that the state and its agencies is the address and the state – and only the state – will have purview over security matters.

Friedson:  Speaking of obligations, you yourself have criticized Arab governments for failing to make good on pledges to the Palestinian Authority. If the United States and Western governments suspend aid, do you feel you can rely on the Arab governments to fill in the gap?

Fayyad:  We have problems now in terms of aid flows. We have an interruption and we have so far an overall flow of aid that’s been less than programmed for this current fiscal year 2011, and what we got of it did not always come in a timely way, which complicated our task and precipitated a financial crisis, which at one point during the year, or twice, made it impossible for us to pay salaries. Not to mention our failure to meet other important obligations to the private sector, vendors, suppliers. This is a major problem for us. To me, the issue is really not to look for other sources of funding in order to overcome the difficulties we face with some sources. Whether they are in the region or outside the region. The solution to me lies in stepping up our own efforts in attaining self-reliance and in the meantime reducing substantially on our reliance on aid. We have made a good deal of progress over the past few years, specifically since 2008 toward reducing our dependency on aid and reliance on it. In numbers, in fact, the aid allocated to us to help us with current expenditure has declined from $1.8 billion in 2008 to about $1 billion this year. This is a significant decline. In GDP terms, it’s a 60% decline from 2008. Actually, under current baseline for financial policy, we’re projecting a couple percentage points more reduction in the deficit of the Palestinian Authority.  We’re not looking for other sources to make up the difference. What we’re looking for to make up the difference is ourselves. We asked ourselves, “Can we do more? Can we go beyond the original base line?” And our answer was, “We must.” We must find a way to substantially reduce the deficit in 2012 beyond the level that was planned on the original baseline and we’re doing it. It is my firm expectation. Based on the strength of measures that we are contemplating and we are about to phase in. We are going to be able to substantially reduce our level of deficit in a way that should make it the last year in which we’re going to need external financial assistance for current budget support for current expenditures. That’s a major achievement. It will be yet another sign – a very important sign—of the advanced state of maturity of governing ourselves; of the level that we have reached.

Friedson:  What do you say to those who warn that because of the political situation fiscally, everything can collapse?

Fayyad:  Well, fiscally, everything is already collapsing. Not can or will. It is collapsing already under the heavy weight of the suspension of the transfers of our revenues that the government of Israel collects on behalf of the Palestinian Authority. We are fast approaching the point of being completely incapacitated by this, and I really mean it. Now we cannot move checks as low in value as $5,000 and $6,000 without making a special effort with the banks. We really are on the verge of being completely incapacitated by this measure by the government of Israel. Now, those revenues which the government of Israel transfers to us are revenues it collects on our behalf under the agreement that regulates economic and financial relations – the Paris Protocols, which go back to 1994. Under the terms of that agreement, Israel – without any condition or qualification – is to transfer on a monthly basis money it collects on our behalf under that agreement. That should not be subject to any conditions of any kind. It’s not in the agreement that Israel could resort to such measures.

Friedson:  Worse case scenario you envision happening?

Fayyad:  I’m realistic. You know, in theory some might say that you should look to others to come up with the difference. But realistically, what is it we’re talking about? We’re talking about an amount of money that comprises about two-thirds of our revenues – about $100 million to $110 million per month. I just told you the order of magnitude. I told you our budget deficit for 2011 is about $1 billion. So figure we’re talking about depriving us of about $100 million a month of our revenues. That would have doubled – it’s been happening since January of this year – our financing requirement. Now, if we could not come up with $1 billion in external assistance, how can we even begin to think that we can come up with $2 billion? So it’s wholly unrealistic to expect that the withholding or suspension of transfer of money from Israel is something that can be compensated for by donor assistance. As a matter of fact, I can tell you that there is nothing we can do by adjustment that can begin to make compensation for the withdrawal of that money.  Worse case scenario, I will go back to what I just told you. This was not meant to be a dramatization or exaggeration at all. This would incapacitate us completely. You’re taking away from us two-thirds of our revenues. It is difficult for me to see how that can be compensated for by external assistance given the difficulties we have experienced in getting much less by way of external assistance. Furthermore, one would be hard pressed to think of adjustment measures that we could take that would really make the adjustment for the withholding of that money. We’re talking about $100 million per month. This is major. In principle, it is possible. In theory, it is possible. In reality, how realistic is it going to be given the orders of magnitude? Makes it unlikely and makes it difficult for me to think that it will be possible to deal with this problem by looking for money from other sources.  You know, we have been living a hand-to-mouth type of existence, living in a crisis mode for more than a year and a half.  I know Palestinian finances. The state of Palestinian finances is something of which I have intimate knowledge of since the inception of the Palestinian Authority and from various angles in different capacities from long before I joined the Palestinian Authority in 2002.  I can tell you with absolute certainty that the Palestinian Authority has never faced a financial situation that is more difficult than the one it is facing now. When I say we’re on the verge of becoming completely incapacitated, I really mean it literally. This is how difficult it is. This is not something you’re going to be able to resolve by having a little more external assistance. The only way it can be resolved is by the government of Israel doing the right thing and that is to live up to the agreement we have—the one that governs our relationship in money and finance. Continued failure to resolve this issue should rightly cast serious doubt about the capacity of the political process to deal with the more difficult issues that are to be negotiated between us and the Israelis. The international community, with all of its influence and its involvement and the fact that it’s been providing us with lots of support to help us with our capacity building and with our effort to get ready for statehood; if with all that standing the international community cannot convince the government of Israel to do the right thing when it comes to the money that should be transferred unconditionally, how much faith can we really have in the ability of the international community to do the heavy lifting that’s necessary to facilitate the political process between us and Israel adequately, effectively in a way that can produce an outcome?

Felice Friedson is President and CEO of The Media Line news agency. She can be contacted at  © 2011. The Media Line Ltd. All Rights Reserved.

Fatah, Hamas agree to establish caretaker government without Palestinian PM Fayyad

Rival Palestinian factions Fatah and Hamas agreed to hold elections next May and are due to establish a caretaker government in the coming weeks which will exclude Prime Minister Salam Fayyad, Palestinian sources said Tuesday.

According to Palestinian sources, a breakthrough in Egyptian mediation efforts occurred in recent days, ahead of the meeting expected to take place next Friday in Cairo between Palestinian President Mahmoud Abbas and Hamas leader Khaled Meshal.

The Fatah-Hamas agreement came to fruition after the committee appointed by the United Nations Security Council to investigate the Palestinians’ membership request said the Palestinian Authority did not fulfill the necessary requirements since it did not control the Gaza Strip.

The new agreement is expected to unite the two governments and aid the PA in gaining a majority in the Security Council. Abbas’ refusal to replace Fayyad was one of the major obstacles to carrying out the reconciliation agreement achieved six months ago.

Any government that includes Hamas would also be shunned by Israel and the West, which have both branded the group a terrorist organization.


Israel cuts tax payments to Palestinian Authority

Israel has suspended $100 million in tax payments to the Palestinian Authority.

Israeli officials had threatened to cut off payments entirely if Palestine was admitted into UNESCO, the United Nations’ cultural agency. Palestine was recognized as a state at UNESCO earlier this week over opposition from U.S. and Israel.

Palestinian officials announced Thursday that Israel had not transferred tax revenue for November. The funds are collected from customs, border and some income taxes and are usually transferred within the first three days of the month. 

Israel has yet to announce a public position on the tax payments, but an official, speaking on condition of anonymity, said that a “temporary hold” has been put in place “pending a final decision,” The Associated Press reported.

According to Palestinian Prime Minister Salam Fayyad, the PA uses that money to pay their employees and has had to borrow from local banks to make up for the loss of funds.

Fayyad will speak to task force, despite split

Palestinian Authority Prime Minister Salam Fayyad is still scheduled to address the American Task Force on Palestine even though the PLO has cut off the group for not backing its statehood push.

The task force, a Washington-based group that advocates for a two-state solution, e-mailed invitees on Oct. 17 to its Oct. 19 gala, reminding them that Fayyad was speaking.

Politico reported last week that the PLO office in Washington — effectively the Palestinian Authority’s diplomatic mission — had written the group to cut off ties because it would not back its statehood recognition push.

The group opposed the push, instead advocating for a U.S.-brokered compromise with Israel to return to peace talks.

Cash-strapped Palestinians cut pay in half for September

The Palestinian Authority will pay only half wages this month, Prime Minister Salam Fayyad said on Tuesday, the second time in three months it has taken such a step because of a financial crisis it blames on donors failing to provide promised funds.

Fayyad announced the half pay measure at a cabinet meeting on Tuesday. The Palestinian Authority took the same measure in July. Last month it paid full salaries but said its funding crisis had not been solved.

The Palestinian Authority pays salaries to 150,000 people in the West Bank and the Gaza Strip and monthly allowances to another 75,000 people.

A Palestinian official, speaking on condition of anonymity, said the aid-dependent authority was facing an unprecedented financial squeeze on funding from Arab states which are failing to meet commitments to provide support.

“We do not know why they are imposing this siege on us,” the official said. In recent years, Saudi Arabia and the United Arab Emirates have been the Palestinians’ most generous Arab donors.

The financial crisis has highlighted the fragility of the PA as President Mahmoud Abbas embarks this month on a diplomatic offensive to secure U.N. endorsement for Palestinian statehood—a step opposed by the United States and Israel.

The Palestinians are hoping to secure an upgrade in their status at a United Nations General Assembly meeting in New York.

The leadership has called for popular protests to add weight to the diplomatic initiative. However, the official suggested turnout at such demonstrations could be hurt by the financial crisis.

“People will be concerned with the financial situation,” the official said.

Reporting by Tom Perry and Ali Sawafta

Hamas rejects Fayyad nomination for prime minister

The Hamas-Fatah reconciliation appeared to be in jeopardy after Hamas rejected Fatah’s nominee for prime minister, Salam Fayyad.

Hamas on Sunday rejected Fayyad, the Palestinian Authority’s current prime minister, to lead the transitional Palestinian government until elections scheduled for next year a day after he was nominated by Fatah.

Members of the new government are set to be appointed this week during meetings in Cairo between Fatah and Hamas officials, where Fayyad could still be given the position.

Keeping Fayyad, who is respected by the West, as prime minister could put donor nations’ minds at ease.

PA President Mahmoud Abbas, who leads the Fatah party, and Hamas, which runs the Gaza Strip, signed a reconciliation agreement in May brokered by Egypt.

PA Cabinet dissolved, Fayyad to form new government

Palestinian Authority Prime Minister Salam Fayyad dissolved his Cabinet and will form a new government.

Monday’s announcement comes two days after a decision by PA President Mahmoud Abbas to hold presidential and legislative elections by September. Chief Palestinian negotiator Saeb Erekat also resigned his position over the fallout of more than 1,600 leaked internal memos detailing negotiating sessions with Israel.

The moves come following popular democracy revolutions in Egypt and Tunisia that resulted in the resignations of the presidents of both countries.

Abbas asked Fayyad to form a new Cabinet with “the broadest representation possible” of Palestinian political movements, said government spokesman Ghassan Khatib, according to The Wall Street Journal.

P.A’.s Fayyad shuns ban, attends Jerusalem dedication

Palestinian Authority Prime Minister Salam Fayyad attended dedication ceremonies for a school in eastern Jerusalem, despite an Israeli ban.

Fayyad on Tuesday attended the dedication of a school in the Dahiyat al-Barid neighborhood, which is located on the Palestinian side of the security fence. He skipped ceremonies to inaugurate a road in Shuafat and visit a school in Sheikh Jarrah.

The events were part of an effort to celebrate P.A.-sponsored renovations of 15 schools in eastern Jerusalem. The P.A. also repaired several roads in the areas near Palestinian neighborhoods.

On Monday, a warrant was issued by Public Security Minister Yitzhak Aharonovitch saying that P.A. events are prohibited on Israeli soil. Aharonovitch’s office clarified Tuesday that Fayyad’s visit to a school on the Palestinian side of the security fence did not violate that order.

Prime Minister Benjamin Netanyahu on Monday also ordered security officials not to allow the P.A. to hold political events within Jerusalem’s municipal borders.

The P.A. renovations on the schools, which do not receive funding from either the education ministry or the city of Jerusalem, came as a surprise to Israeli officials.

Speaking at the ceremony in Dahiyat al-Barid, Fayyad said that the suburbs of Jerusalem were part of the Palestinian capital, Israel Radio reported.

“Netanyahu defined these suburbs as suburbs of Jerusalem, the united capital. And we say, yes, these are suburbs, but suburbs of our occupied capital which will always be the capital of our independent state,” Fayyad said. He planted an olive tree at the entrance to the school.

Meeting again with Jewish leaders, Abbas broaches substance

For Mahmoud Abbas and U.S. Jewish leaders, their second date featured a little more substance and a little less flirtation. And this time the Palestinian Authority president brought a wing man.

Abbas and his prime minister, Salam Fayyad, met separately Tuesday evening with Jewish leaders in New York —a sign of understanding on the Palestinian side of the importance of Jewish sensibilities, in Israel and the Diaspora, to advancing the peace process.

Abbas at the meeting seemed ready to move forward on some substantive issues, which took place during the launch of the U.N. General Assembly session.

In the first meeting, in June, Abbas had frustrated Jewish leaders by dodging issues of substance—returning to direct talks and incitement—but set a tone unprecedented in Palestinian-Jewish relations by recognizing a Jewish historical presence in the land of Israel.

When a group of Palestinian intellectuals challenged Abbas on the issue a month later, instead of backtracking—typical of the one step forward, two steps back peace process tradition—his envoy in Washington, Ma’en Areikat, repeated and reaffirmed the comments.

In the interim, direct talks have been launched, and Abbas was prepared to move forward on some substantive issues at Tuesday’s meeting.

“I would like for us to engage in a dialogue where we listen to each other and where I can respond to your questions because I trust we have one mutual objective—to achieve peace,” he said, according to notes provided by the Center for Middle East Peace.

The center, a dovish group founded by diet magnate Daniel Abraham, sponsored the Abbas meeting, as it did in June. The Fayyad meeting was sponsored by The Israel Project, which tracks support for Israel in the United States and throughout the world.

Making his clearest statement to date on the matter, Abbas said he would not walk away from negotiations should Israeli Prime Minister Benjamin Netanyahu fail to extend a partial 10-month moratorium on settlement building set to lapse next week. The PA leader suggested that a way out might be if Netanyahu does not make a public issue of the end of the moratorium.

“I cannot say I will leave the negotiations, but it’s very difficult for me to resume talks if Prime Minister Netanyahu declares that he will continue his activity in the West Bank and Jerusalem,” Abbas said.

Netanyahu is under pressure from the settlement movement not only to end the moratorium, but to resume building at levels unprecedented in his prime ministership. The Israeli leader also is heedful, however, of Obama administration demands that the parties not go out of their way to outrage each other.

Among the Jewish leaders at the Abbas meeting were Malcolm Hoenlein and Alan Solow, the executive vice chairman and chairman of the Conference of Presidents of Major American Jewish Organizations; Abraham Foxman, the Anti-Defamation League’s national director; and leaders of umbrella groups such as the Jewish Council for Public Affairs and the Jewish Federations of North America.

Also on hand were Clinton administration foreign policy mavens such as Sandy Berger, Madeleine Albright and Daniel Kurtzer, who maintain close ties with Obama’s foreign policy team.

Abbas also showed that he was attempting to bridge a gap on what until now seemed an intractable issue.

The Palestinians have long accepted the inevitability of a demilitarized state, but they reject a continued Israeli military presence. Netanyahu told Jewish leaders in a conference call Monday that he would trust no one but Israeli troops to preserve Israel’s security on the West Bank’s eastern border. At the meeting, Abbas floated the idea of a non-Israeli force that would include Jewish soldiers.

On other issues, Abbas was less prepared to come forward.

Israel wants a clear commitment from the Palestinians that any discussion of the refugee issue would clearly preclude a flooding of Israel with descendants of refugees of the 1948 war, which Israelis say is a recipe for the peaceful eradication of Israel. Behind closed doors, the Palestinians have said they are ready to provide Israel the assurances it needs, but Abbas said at the meeting only that it is a final-status issue.

Another issue could yet scuttle the talks now that the parties seem ready to put the settlement moratorium behind them.

Netanyahu, having extracted what seems to be an irreversible Palestinian recognition of Israel during his previous turn in the job, in 1998, now wants the Palestinians to recognize Israel as a Jewish state—a result of the emergence of movements that seek to strip Israel of its Jewish character.

Abbas has resisted, in part because he sees such recognition as cutting off the 20 percent of Israel that is Arab, but also because he seems baffled by the demand. He argues that states are free to define themselves and should not need the approbation of others.

“If the Israeli people want to name themselves whatever they want, they are free to do so,” the PA president said.

In a sign that he also was seeking conciliation on the matter, Abbas said at the meeting that he would accept the designation if it were approved by the Knesset. He repeated his recognition of Israel’s Jewish roots and decried Holocaust denial.

It was not far enough for some of his interlocutors.

Stephen Savitzky, the president of the Orthodox Union, wanted Abbas to recognize not only Jewish ties to the land but with the Temple Mount, the site of the third holiest mosque in Islam.

“President Abbas missed an opportunity this evening to make a key statement that would have created good will in the Jewish community,” Savitzky said in a statement.

Fayyad, less charismatic but deemed more trustworthy than Abbas by the pro-Israel intelligentsia, appeared to fare well in the dinner hosted by The Israel Project, which hews to the centrist-right pro-Israel line of much of the U.S. Jewish establishment. He scored points for admitting that the Palestinian Authority had not done enough to combat incitement.

“Prime Minister Fayyad’s spirit of hope was extremely welcome,” said Jennifer Laszlo Mizrahi, a founder of The Israel Project.

“We know that some people will criticize us for falling for a Palestinian ‘charm offensive.’ However, there is nothing offensive about charm. More Jews and Muslims, Israelis and Palestinians, should sit together over dinner and exchange ideas—especially when it can help lead to security and peace.”

Katsav to be Indicted, P.A. Prime Minister Resigns

Katsav to Be Indicted on Sex Charges

Former Israeli President Moshe Katsav will be indicted on sexual offense charges, the attorney general announced.

Menachem Mazuz said Sunday that Katsav will be indicted on rape and indecent assault charges involving several women who worked closely with him when he served as tourism minister and president. He also will be charged with obstruction of justice.

State Prosecutor Moshe Lador concurred with the charges after determining that there was enough evidence to make a case.

Katsav was first accused in 2006 and stepped down as president shortly before his term ended in June 2007. He was replaced by Shimon Peres.

Katsav struck a plea deal in June 2007, under which the rape charges would be dropped, but last April he reneged on the deal.

P.A. Prime Minister Submits Resignation

Palestinian Authority Prime Minister Salam Fayyad submitted his resignation, which could speed the formation of a Fatah-Hamas unity government.

P.A. President Mahmoud Abbas asked Fayyad after his announcement Saturday to remain in his position until the talks were completed. Fayyad said he would step down with the formation of the new government or by the end of March.

Abbas fired Prime Minister Ismail Haniyeh of Hamas and replaced him with Fayyad after Hamas took over the Gaza Strip in 2007.

Millions of dollars pledged to the Palestinians earlier this month and last year were donated on the condition that they are funneled through the Fayyad government. It is unclear how his resignation will affect the pledges, according to reports.

Fayyad said of his resignation in a statement Saturday, “This step comes in the efforts to form a national conciliation government.”

Unity talks were scheduled to resume Tuesday in Cairo.

Haniyeh, Hamas Popularity Rise, Poll Shows

Hamas’ prime minister would defeat Mahmoud Abbas in a presidential election, a new poll showed.

The survey published Monday giving Ismail Haniyeh an edge over the Palestinian Authority president also showed that Hamas’ popularity has increased among Palestinians in the aftermath of Israel’s military operation in the Gaza Strip.

Haniyeh received a 47 percent popularity rating among the more than 1,270 Palestinians surveyed March 5-7 in the West Bank and Gaza Strip to 45 percent for Abbas. A similar poll in December had Haniyeh at 38 percent and Hamas at 48 percent.

Meanwhile, the poll showed that jailed Fatah leader Marwan Barghouti would easily defeat Haniyeh, 61 percent to 34 percent.

Hamas’ popularity increased to 33 percent, a 5 percent rise from December. Fatah, however, remained the more popular faction with 40 percent of support, compared to 42 percent three months ago.

“Despite the visible increase in the popularity of Hamas and Haniyeh,” the pollsters reported, the overwhelming majority, 71 percent, believes Palestinians are worse off than they were before Israel’s Gaza operation.

The poll, which was conducted by the West Bank-based Palestinian Center for Policy and Survey Research, had a 3 percent margin of error.

The findings were released as Hamas and Fatah negotiators arrived in Cairo for talks aimed at ending their differences and forming a unity government. Hamas won a Palestinian parliamentary election in 2006 and seized control of the Gaza Strip the next year after fighting with Fatah.

Son of Dead Sea Scrolls Expert Charged With Theft of Professor’s Identity

The son of a Dead Sea Scrolls expert was accused of identity theft.

Raphael Golb, a real estate lawyer in New York City, was arrested March 5 and charged with identity theft, criminal impersonation and aggravated harassment, The New York Times reported.

Golb is accused of impersonating a New York University professor who differed with Golb’s father about the origins of the Dead Sea Scrolls, a set of ancient religious texts discovered near the Dead Sea settlement of Qumran in the 1940s and ’50s.

Prosecutors say Golb used a fake e-mail address in the name of the professor, Lawrence Schiffman, to fabricate an admission that Schiffman had plagiarized his father’s work.

Golb faces up to four years in prison if convicted.

Medical Journal Focuses on Palestinians

A prominent medical journal devoted a special issue to “Health in the Occupied Palestinian Territory.”

The special issue of the Lancet, a leading general medical journal, includes articles by academics from the West Bank, Europe and the United States.

“Hope for improving health and quality of life of Palestinians will exist only once people recognize that the structural and political conditions that they endure in the occupied Palestinian territory are the key determinants of population health,” one article reports.

The series of articles includes pieces on “The Occupied Palestinian Territory: Peace, Justice and Health,” “Peace and Health in the Occupied Palestinian Territory” and “Keys to Health: Justice, Sovereignty and Self-determination,” as well as articles on Palestinian health issues.

The verdict concerning Israel is mixed. There is criticism about roadblocks, with a report that in the past decade, 69 women gave birth at roadblocks. The report also addressed child mortality: “Infant mortality dropped between 1967 and 1987 but stalled between 2000 and 2006 at 27 per 1,000 live births.” The rate in Israel, the report notes, is 3.9 per 1,000.

Touro Synagogue Cancels Tours

Touro Synagogue, the nation’s oldest Jewish house of worship, canceled public tours because of financial difficulties.

The last two paid staff members of the Newport, R.I., synagogue were let go last week, according to the Providence Journal.

Plans to open a museum of American Jewish history at the site this summer will go forward. Group tours already scheduled for the summer will take place, but no new ones will be booked, said a spokesman for the nonprofit foundation that runs the project.

Touro is a major tourist destination, especially for Jewish visitors. It was built in 1763 and declared a national historic site in the 1940s. In 2001, the National Trust for Historic Preservation designated it as the nation’s first religious historic site.

Briefs courtesy of Jewish Telegraphic Agency.