Quartet to discuss funding for Palestinian Authority

MIDDLE EAST: The quartet comprising the US, UN, EU and Russia is scheduled to meet today to decide what to do about funding for the Palestinian Authority.

When Hamas won a majority of seats in the Palestinian legislature in the January election, Washington cut aid to the Palestinians and exerted pressure on the EU and the Arabs to follow suit until Hamas halts violence and recognises Israel.

An informant working for a non-governmental agency in the West Bank and Gaza said Washington's stand amounted to an "180 degree turn". Before the poll, the US was investing millions to boost the Fatahdominated Authority headed by President Mahmoud Abbas, but now the Bush administration is trying to undermine it with the aim of ousting Hamas, he said.

Before submitting his resignation as quartet envoy, James Wolfensohn warned that the policies adopted by Israel and the international community could cause the Authority's collapse. He said Palestinian GDP could fall by 27 per cent this year unless international donors continue to provide $1 bil- lion (€780 million) in aid and Israel pays $55 million a month in revenues collected on behalf of the Authority. Israel must also reopen Gaza border crossings and grant freedom of movement to Palestinians, he said.

In the absence of the Authority 60 per cent of Palestinians would be without health and educational services and all four million without an administration and police force. The 40 per cent of Palestinians who are refugees are already suffering from cuts in the budget of the UN Relief and Works Agency (UNRWA), which provides rations and runs clinics and schools. By 2008 the number of Palestinians living below the poverty level could rise to 74 per cent.

Ahead of the quartet meeting, Washington attempted to block a French proposal for a World Bank supervised trust fund to make direct salary payments to 165,000 Authority employees. While the Israeli press reported that secretary of state Condoleezza Rice has indicated the US is prepared to accept the proposal, this has not been confirmed.

US pressure on international and local banks is preventing the transfer of $120 million raised by Iran, Saudi Arabia, and Qatar. These financial institutions, which use US banks as clearing houses, fear sanctions if they do not boycott the Authority.

The Bush administration's stance amounts to abandonment of a policy adopted in 1950 when UNRWA was established with the aim of preventing impoverished Palestinian refugees from becoming a destabilising factor in the region. Today Gaza and the West Bank are chaotic and the region is highly unstable due to corrupt regimes, poverty, the rise of religious fundamentalism and the Iraq war.

Although the policy of half a century may no longer apply as far as US planners are concerned, the World Bank expressed alarm in a memorandum released ahead of the meeting. It warned that the collapse of the Authority would have a "negative impact on security, which would make it difficult . . . for providers of humanitarian assistance to operate properly, while the lack of institutions could make the West Bank and Gaza ungovernable."