Appendix: Government response
[Paragraph 10] We do not in any way condone the
firing of qassam rockets from Gaza into Israel. Such actions
need to stop. The question of a proportionate response nevertheless
arises. The Israeli Defence Force's response has killed and injured
many more people than the actions of the Palestinian militants.
Many civilians, including women and children, have been killed
in Gaza. We accept that in situations of conflict, there will
be mistakes and even excesses but proportionate response must
be an integral part of any state's security policy. The actions
of neither the Palestinian militants nor the IDF in and around
Gaza enhance the prospects for a peaceful settlement.
We agree with the Committee's recommendations. All
parties should exercise restraint and take only proportionate
measures that are in accordance with international law. We have
made our concerns about the effect of Israeli military operations
on the Palestinian population clear to the Israeli Government
and will continue to do so. It is in the interest of all parties
to end the violence and seek a peaceful solution to the Israeli/Palestinian
conflict.
[Paragraph 17] We believe that the international
community is right to place pressure on Hamas to change those
policies which militate against a peace process. However, this
would best be achieved through dialogue and engagement rather
than isolation. The danger of the current approach is that it
might push Hamas into a corner which encourages violence rather
than negotiation. The international community must also ensure
it is not bolstering one faction against the other and thereby
increasing the risk of internal strife.
The peace process cannot move forward whilst one
party refuses to recognise the right of the other to exist. The
Quartet principles ask no more of the Hamas-led Government than
they did of its predecessors: renunciation of violence, recognition
of Israel's right to exist, and acceptance of previous agreements
and obligations, including the Roadmap.
We welcome the successful outcome of Saudi Arabia's
efforts to broker a National Unity Government, and support President
Abbas's efforts for intra-Palestinian reconciliation. Following
the formation of the National Unity Government, we will be reviewing
its implications for the Temporary International Mechanism. We
hope that this represents the beginning of change within Hamas
and the start of them facing up to their responsibilities in government.
We will continue our policy of judging any new government by
its actions.
[Paragraph 21] We agree with the British Prime
Minister that until the Israeli-Palestinian conflict is solved
there will be no peace in the region. 2006 has been a year of
crisis for the OPTs; much of the progress made in the past has
been eroded. We hope the Prime Minister's comments will revive
interest in a peaceful settlement for the Israeli- Palestinian
conflict which has continued for several decades.
As the Prime Minister has made clear, progress in
the Middle East Peace Process remains at the core of the UK's
strategy for the Middle East. We continue to work closely with
Palestinians, Israelis and international partners to re-invigorate
the peace process. We welcomed the meeting on 19 February between
Secretary of State Rice, Prime Minister Olmert and President Abbas.
Together with the Quartet's meeting on 21 February, this makes
clear the continued engagement of the international community,
and helps to maintain momentum.
ECONOMIC GROWTH AND PRIVATE SECTOR DEVELOPMENT
[Paragraph 35] The environment in the Occupied
Palestinian Territories is not conducive to the growth of the
private sector. On the contrary, current measures imposed by the
Government of Israel, on security grounds, provide significant
disincentives for local and foreign investment in the OPTs. This
worrying trend threatens the viability of a future Palestinian
state. Donors can play a role in encouraging the creation of an
enabling investment climate but a reliable and predictable environment
requires a peace settlement. Nevertheless, more pro-active steps
can be taken, even prior to the attainment of a peace settlement.
The easing of occupation could dramatically improve the prospects
for business development and this in turn could improve the prospects
for a durable peace. There is particular potential to encourage
the development of small business and the third sector. We recommended
in our report on private sector development that DFID should develop
a strategy for private sector development in conflict-prone and
conflict-affected states. The OPTs are an obvious example of where
this would be valuable.
We agree that current restrictions on movement and
access imposed by the Government of Israel, on security grounds,
threaten the viability of a future Palestinian State. Only a
peace settlement can provide a reliable and predictable investment
climate. Most recently, the World Bank's Investment Climate Assessment,
funded by DFID, concluded that shrinking market access and lack
of free movement are the main constraints to growth in the Occupied
Palestinian Territories. The Investment Climate Assessment makes
recommendations for donor intervention in three areas: i) re-establishing
movement and access, while maintaining Israeli security; ii) improving
the investment climate; and iii) developing the capacity of enterprises.
In September 2005, the Chancellor commissioned Ed
Balls, Economic Secretary to the Treasury, and Jon Cunliffe, Second
Permanent Secretary to the Treasury to write a report on the opportunities
to support economic development in the Occupied Palestinian Territories
to accompany and enhance the peace process. The Treasury is continuing
its work on this report, The Economic Aspects of Peace in the
Middle East, and plans to publish it in the spring. The report
will build on analysis from the World Bank and consultation with
key domestic and international stakeholders. It will look at
all aspects of the Palestinian economy, propose concrete and credible
ways in which the international community can, under the right
circumstances, act in support of the Palestinian economy, and
foster a self-reinforcing cycle of an improving political, security
and economic environment.
TRADE
[Paragraph 37] Current restrictions, including
those on movement and access, make Palestinian trade uncompetitive
and the interim Association Agreement with the EU inoperable.
The viability of a future Palestinian economy will depend significantly
on its trading opportunities. The EU must ensure that Palestinian
products are not being unfairly treated by Israel and measures
need to be put in place to make the Association Agreement effective.
We strongly agree that, without secure and predictable
access to both domestic and international markets, the private
sector cannot invest and the economy cannot grow. On paper, the
Occupied Palestinian Territories enjoy a liberal internal market
and external trade regime. However, in practice both internal
economic activity and external trade are seriously impeded by
restrictions imposed by Israel. Neither short-term economic recovery
nor sustained long-term growth will be possible until restrictions
are removed or substantially relaxed.
The UK is pressing Israel to remove restrictions
that have no clear security justification and urges both sides
to implement their obligations under the November 2005 Agreement
on Movement and Access. The UK government is working with the
US and others to improve the operation of the Karni crossing-point.
DFID has funded a World Bank analysis of the viability of the
crossing between Gaza and Egypt at Rafah as a trade corridor.
This has shown that the Rafah crossing can potentially provide
high returns for Palestinian exports. DFID is now discussing
with the European Commission and other donors how best to take
forward these findings.
[Paragraph 38] There is an incongruity in allowing
Israel to continue to benefit from a type of agreement from which
Israel prevents Palestinians benefiting. Continued dialogue with
Israel is certainly necessary but the Association Agreement appears
to give tacit assent to the restrictions on movement and access
which Israel imposes on the Palestinians. The UK should urge the
EU to use the Association Agreement with Israel as a lever for
change and to consider suspending the Agreement until there are
further improvements in access arrangements.
The EU and Israel discuss what measures Israel has
taken, and will need to take, in order to comply with its human
rights obligations at the EU-Israel Human Rights Working Group.
The UK Government, along with our EU partners, believes that the
best way to make progress on human rights is through regular discussion.
However, we do not believe that suspension of the EU-Israel Association
Agreement is the best way forward.
[Paragraph 39] The regulation requiring detailed
postcodes for settlement products is a recent and welcome development.
It is important that the EU is not indirectly supporting and giving
benefit to unlawful settlements on Palestinian land. However,
to be effective, information about the postcodes needs to be widely
understood in the EU and member states should ensure that robust,
cost-effective arrangements are put in place to monitor goods
being imported from Israel. The UK Government should press for
the EU to take practical action to achieve these things.
The EU does not recognise settlements as part of
Israel and does not accept goods from settlements as coming under
the EU-Israel trade agreement. The UK has strongly supported
efforts to prevent settlement products being passed off as Israeli
in order to benefit from trade preferences under this agreement.
We support the postcode regulation as the latest stage in these
efforts.
[Paragraph 39] It has been reported that the Government
of Israel is compensating Israeli manufacturers beyond the Green
Line who export to the EU for the loss of their preference. This
matter should be fully investigated by the EU to determine whether
such practices undermine the basis of the Agreement.
The UK believes that settlements are illegal under
international law. We therefore support the policy of ensuring
that the trade preferences Israel receives under the Association
Agreement are not extended to Israeli settlements in the Occupied
Palestinian Territories.
The European Commission is aware of the existence
of a mechanism by which the Israeli government pays compensation
to Israeli manufacturers beyond the Green Line. It is in discussions
with the Government of Israel and has asked for clarification
on whether payments using the mechanism have been made. The European
Commission is also studying the mechanism to see whether it is
compatible with trade agreements that Israel has signed up to.
POVERTY
[Paragraph 49] Although the West Bank and Gaza
were suffering from the impact of occupation well before 2000,
developments since the outbreak of the intifada in
that year took the socio-economic situation in the OPTs to crisis
level. That crisis has intensified in 2006. In its current phase
it is largely triggered by the withholding of Palestinian Authority
revenues by the Government of Israel and the withdrawal of budgetary
assistance by the major donors. These actions have made a bad
situation worse. The PA is operating with a fraction of its normal
budget and its contribution to household income has declined.
The Government of Israel has been urged by the EU General Affairs
Council to stop withholding the revenues, or to pay the revenues
through the EU's own Temporary International Mechanism. There
have been recent reports of an agreement between the Government
of Israel and the Palestinian President on the repayment of some
of the withheld funds. This is a matter of the highest priority.
Current measures taken by the GoI and the international community
are harming ordinary people. We recommend that the UK Government
make specific representations to the Government of Israel to pay
the remainder of the revenues due to the recognised institutions
of the PA. If negotiations take place to channel the revenues
through the Temporary International Mechanism or the Office of
the President, it is important that these recognize that the revenues
belong to the Palestinians, not the Government of Israel, and
that any such discussions expedite, rather than delay, the revenues
being put to use in the OPTs.
As set out in the 1994 Paris Protocols, Israel collects
the customs revenue on behalf of the Palestinians. The UK, both
bilaterally and as part of the EU, has called for Israel to transfer
the Palestinian customs revenue. We welcome the transfer of $100
million and hope that this is a first step towards the full transfer
of customs revenue to President Abbas. We will continue to raise
this issue with the Israeli authorities.
Total bilateral UK assistance to the Palestinian
people remained at the same level in 2006 as in 2005. EU aid
as a whole is estimated to have increased by some 27% in 2006.
While it is not currently possible to provide budgetary aid to
the PA, the combined UK and EU assistance through the Temporary
International Mechanism (TIM) substantially exceeds that provided
previously in budget support. The TIM has paid allowances to
pensioners, social hardship cases and PA workers, paid for energy
supplies to essential PA services and provided supplies to enable
PA clinics and hospitals to continue working. Thus, while the
increased EU aid is not going through the PA, it is paying the
costs of essential services that would have fallen to the PA.
It is therefore not correct that the economic crisis in the Occupied
Palestinian Territories, or indeed the PA's fiscal crisis, lies
at the hands of donors.
HUMANITARIAN ASSISTANCE
[Paragraph 52] We agree with DFID that, while
the UN can provide short-term humanitarian assistance, it cannot
replace the services normally offered by the Palestinian Authority.
Current high levels of humanitarian assistance may be necessary
but they far exceed per capita levels provided in many poorer
countries, for example in sub-Saharan Africa, and are not sustainable
in the long term.
We agree that the current high levels of humanitarian
assistance, provided by the UN and others, are necessary to meet
urgent humanitarian needs and to prevent public services and institutions
from breaking down completely. Without external support, it is
likely that poverty levels would rapidly increase. The amount
of aid given to the Occupied Palestinian Territories is only so
great because of the exceptional political circumstances and the
impact of closures and restrictions on economic activity. The
formation of a viable Palestinian state able to support itself
would create an environment for rapid private sector growth.
As a result, aid could be substantially reduced. The current levels
of aid are justified because the regional and global impact of
peace, including on development, would be immense.
THE ROLE OF THE UN RELIEF AND WORKS AGENCY
[Paragraph 57] The UN Relief and Works Agency's
capacity is stretched by the current crisis which has created
an increased demand for its services. Even before the current
crisis, UNRWA had requested more financial resources and increased
management capacity to ensure a high standard of service delivery.
We urge donors to bring greater predictability to UNRWA funding
so that appropriate planning can take place to ensure proper provision
of services for Palestinian refugees. DFID's additional funding
over a four-year period is a welcome contribution and will also
benefit non-refugees in the current crisis. If the UNRWA mandate
is extended in 2008 it must be made clear to donors that the current
level of funding is insufficient to provide high quality services
for Palestinian refugees.
DFID recognises the important support that UNRWA
provides to Palestinian refugees in the Occupied Palestinian Territories
and across the region. DFID's commitment of £100 million
over the next five years provides the type of predictable funding
UNRWA needs to help it plan to meet refugee needs. DFID continues
to encourage other donors to follow the same approach, most recently
at UNRWA's Advisory Commission in February 2007.
THE RESPONSIBILITIES OF THE GOVERNMENT OF ISRAEL
[Paragraph 60] While severe pressure has been
placed on the Hamas-led Palestinian Authority to change its policies
and accept Quartet principles, no comparable initiative has been
taken with the Government of Israel to encourage it to put into
practice agreements it has signed up to or to end clearly identified
practices which are causing poverty and suffering in Gaza. We
recommend that the UK Government urgently initiate a dialogue
with the Government of Israel about those actions which are creating
a humanitarian crisis in Gaza.
We continue to call on all parties to live up to
their obligations. We regularly discuss Gaza with Israel, and
the need to improve the humanitarian situation there, particularly
by easing restrictions on movement and access. We support the
role that the EU Border Assistance Mission plays at Rafah and
we raise its operation regularly with the Israelis.
[Paragraph 64] The conflict between Palestinians
and Israel is resulting in a high civilian death toll. There has
been a marked increase in the number of Palestinian casualties
in 2006. Greater pressure must be exerted on both sides to prioritise
physical protection of civilians.
We support the Committee's recommendation. We continue
to call on all sides to ensure that they avoid civilian casualties
and that all measures are in accordance with international law.
Any attempt to target civilians is unacceptable.
THE INFRASTRUCTURE OF OCCUPATION
[Paragraph 71] The proposed E1 settlement will
severely impact on Palestinian territorial contiguity. The current
explosive nature of the relationship between Israel and the Palestinians,
and the significance which Palestinians attach to the city of
Jerusalem, should be sufficient incentive to shelve plans for
E1. We recommend that the UK Government initiate talks with the
Government of Israel about the unacceptable nature and likely
impact of E1 and identify what measures could be applied by the
international community if Israel persists with the implementation
of its E1 plan.
The UK remains very concerned about the proposed
settlement at E1 and the expansion of the settlement of Ma'ale
Adumim. Implementation of the E1 proposal would effectively split
the northern and southern West Bank in two, and separate East
Jerusalem from the rest of the West Bank. We continue to raise
our concerns with the Israeli authorities and will continue to
monitor the situation closely.
Israel should freeze all settlement activity including
the natural growth of existing settlements. It should dismantle
all outposts built since March 2001. Settlement building is contrary
to international law and is an obstacle to peace. This is our
consistent policy.
[Paragraph 78] Israel is entitled to defend its
citizens. Attacks against civilians violate international humanitarian
law. However any such defence must be proportionate to the threat.
The system of separate roads and road blocks is discriminatory
and much of the need for such infrastructure arises from the presence
of settlements. Palestinians are being treated as second-class
citizens in their own country. The checkpoints are slow and the
access roads are poor. The operation of the checkpoints is haphazard
and arbitrary. Where humanitarian needs exist, these must, as
a matter of priority, be met without delay. We are extremely disappointed
that no progress has been made in this area since the previous
International Development Committee's report in 2004.
The continued Israeli closure regime of roadblocks
and checkpoints has a severe impact on almost every Palestinian
in the Occupied Palestinian Territories. This restriction on
freedom of movement cannot always be justified on security grounds.
Closures restrict access for medical personnel to those who need
their services, they make it difficult for children to travel
to school, and hinder ordinary Palestinians when travelling to
work. They also have a devastating effect on the Palestinian
economy. Economic hardship and unemployment contribute to the
Palestinians' sense of frustration and make a comprehensive settlement
more difficult to achieve. We have expressed our concerns to
the Israeli Government on political, legal and humanitarian grounds,
and will continue to do so.
THE SEPARATION BARRIER
[Paragraph 87] Israel has the right to construct
a barrier inside its own territories or along the Green Line.
However, the barrier, as it is currently constructed and according
to its projected route, destroys the viability of a Palestinian
state. It divides Palestinian communities and families and it
separates Palestinian farmers from their land. The barrier has
been declared contrary to international law by the International
Court of Justice. The UK Government shares the view that the building
of the wall on Palestinian land is illegal. Building up the Palestinian
economy and business environment is not possible under these conditions.
The Government of Israel bears primary responsibility for ensuring
public order and humanitarian conditions in the Palestinian territories.
We accept that Israel's security concerns are legitimate, but
it should not unlawfully seize Palestinian land or place unnecessary
obstacles in the way of Palestinian economic development. The
rulings against the separation barrier are clear—the barrier
must be removed from Palestinian land and the UK Government should
make renewed representations to the GoI about this and consider
what further responses would be appropriate from the international
community should Israel continue to ignore these rulings.
We agree with the Committee's recommendations. We
recognise Israel's right to defend itself but have urged the Israeli
Government at all levels to re-route the barrier on or behind
the Green Line. The UK's position has remained clear, ie that
the barrier should be removed from all Palestinian land.
THE AGREEMENT ON MOVEMENT AND ACCESS
[Paragraph 94] We accept that the security situation
deteriorated significantly in 2006 and we acknowledge the legitimate
security concerns of Israel. Decisions by the Government of
Israel not to put into practice procedures acceded to in the Agreement
on Movement and Access are, however, causing severe damage to
the Palestinian economy and in particular to Gaza. Disengagement
from Gaza has no chance of success under these conditions. Putting
into practice measures agreed to in the Agreement on Movement
and Access would provide a significant boost to the Palestinian
economy. This is an area in which progress can be made prior to
the achievement of a political solution. We recommend that the
UK Government accelerate its efforts to prevent the Agreement
from failing.
Together with our international partners, we continue
to call on both sides to implement the November 2005 Agreement
on Movement and Access. We are currently working with the US Security
Co-ordinator to improve access at the Karni crossing-point and
continue to support the work of the EU Border Assistance Mission
at the Rafah crossing-point.
[Paragraph 95] Assurances and procedures put in
place by the EU Border Assistance Mission, in cooperation with
Palestinian border police and customs officers, on the Rafah crossing
should enable the crossing to be opened as envisaged under the
Agreement on Movement and Access. The decision not to do so leads
us to question the extent to which Israel is motivated by legitimate
security considerations.
We continue to call on Israel to honour its obligations
under the November 2005 Agreement on Movement and Access. Both
bilaterally, and together with EU partners, we call on Israel
to keep Rafah crossing point open as set out in the Agreement
on Movement and Access.
[Paragraph 96] The back-to-back system is outdated,
slow, unpredictable and costly. What we observed at the Awarta
checkpoint in the middle of the West Bank leads us to question
the contribution it makes to enhancing security, while it is quite
clear that it is one of the measures strangling the Palestinian
economy.
We continue to call on all parties to fulfil their
commitment under the November 2005 Agreement on Movement and Access.
We would welcome an end to the back-to-back system, but we believe
the main problem is not so much the system itself, but the way
it is implemented. We are working with partners to enhance the
border-crossing standards and raise our concerns regularly with
the Israelis.
[Paragraph 100] We believe there is a fundamental
relationship between Palestinian economic viability and Israeli
security. The benefits from the achievement of both would be mutual.
The efforts of the US Security Co-ordinator to improve the security
of the Karni crossing are a step in the right direction. The effective
operation of Karni would help to ensure a predictable and efficient
passage of goods between Israel and Gaza. Without this, the Palestinian
economy cannot grow. A viable Palestinian economy would serve
the interests of Palestinians and Israelis and both have responsibilities
to ensure the safe, predictable and secure passage of goods and
people as set out in the Agreement on Movement and Access. Making
the Agreement work should be a priority for both parties and for
the international community.
We agree with the Committee that Palestinian economic
viability can aid Israeli security. A key area for improving
the Palestinian economy is the easing of restrictions on movement
and access. It is precisely for this reason that we are supporting
the efforts of the US Security Co-ordinator to improve movement
and access. The UK Government is currently seeking Parliamentary
approval for a package of support to the Karni project of over
£350,000. We also support the work of the EU Border Assistance
Mission in Rafah.
THE TEMPORARY INTERNATIONAL MECHANISM
[Paragraph 107] It is clear that there have been
delays in getting Window I of the Temporary International Mechanism
fully operational. We understand the need for caution in the procurement
of supplies of drugs and accept that the European Commission would
have faced the same problems as the World Bank if it had administered
Window I. However these problems could have been anticipated and
alternatives considered to ensure the continued supply of medicines.
We believe that the TIM's objective of ensuring that essential
services continue has not thus far been met in relation to the
supply of essential drugs.
We agree that there were delays in getting the World
Bank-managed Window I of the TIM fully operational. We considered
several options for delivering essential health supplies before
deciding to disburse our funds through the Bank. These included
putting funds through the UN and procuring, managing and monitoring
the work ourselves. As the World Bank proposed to use an existing
project to deliver health supplies we judged that it would be
able to deliver quickly. However, initial delays due to procurement
difficulties on the part of the World Bank were compounded by
limited capacity within the Palestinian Authority, in part due
to the public sector strike. Window I is improving and deliveries
of essential drugs have been taking place since January 2007.
We are pressing for an evaluation, and for the World Bank to identify
ways to further accelerate the procurement process. We have also
provided technical assistance to the Office of the President,
which has helped to improve delivery.
[Paragraph 108] Window II was a timely response
to the bombing of the Gaza power plant. It is working well in
difficult circumstances and fulfilling its objectives.
We agree that Window II, managed by the European
Commission, is working well and has played a critical role in
ensuring that basic services continue to be delivered to 1.3 million
people in Gaza. It provided fuel for emergency generators at
hospitals, for clinics and for water and sanitation facilities
following the damage to Gaza Power Station in an Israeli air strike.
Since the Power Station returned to service in the autumn, Window
II has provided fuel to enable power supplies throughout Gaza.
To date over 4.8 million litres of fuel have been delivered.
The European Commission is currently considering how Window II
should continue to operate over the coming months.
[Paragraph 112] Window III is making a useful,
if limited, contribution to health care workers, social hardship
cases, low-income cases and pensioners. It is not a substitute
for, or equal in value to, salaries or normal welfare arrangements.
In the current circumstances, it is helping to meet the basic
needs of some groups of people. There are many public sector workers
who do not receive anything through the TIM and who are worse
off as a result of the fiscal crisis facing the PA. The strikes
throughout the civil service demonstrate their dissatisfaction.
The main aims of support through Window III are to
help meet the basic needs of the poorest public-sector workers
and those people facing the most severe hardship. The TIM also
provides a vital injection of cash into the Palestinian economy.
The scope of TIM payments to PA workers has been progressively
expanded as more funds have become available. Initially, health
workers and pensioners were the only beneficiaries, but recipients
now include all public-sector workers except those working in
the security sector. In addition, the list of beneficiaries of
social hardship payments has also been extended. In total some
150,000 people have received payments. This means that, assuming
a family size of six, more than 900,000 Palestinians have benefited
directly from payments under the TIM. The TIM is not a full substitute
for PA salaries, but it does comprise a larger EU contribution
to Palestinian welfare than previously provided through budget
support.
[Paragraph 115] We recommend greater donor co-ordination
to facilitate the work of the EU Co-ordinating Office for Palestinian
Police Support (EU COPPS) which we believe can play an important
role in developing policing skills and a non-factional approach
to promoting law and order. We are also pleased that discussions
are taking place between the EU and the Office of the President
about the possibility of the security services being paid an allowance
through the TIM. In highly inflammatory situations it is important
that the civil police feel they are in a position to carry out
their duties effectively and do not abuse their position because
of economic hardship. However any decision to fund the civil police,
or the security forces of the Office of the President, will need
to take account of the rivalry between Hamas and Fatah security
forces and potential misdirection of funds to international terrorism.
We agree that the EU Police Co-ordination Office
for Palestinian Police Support (EU POLCOPPS) mission plays a key
role in supporting the development of the Palestinian Civil Police.
The UK is in favour of EU POLCOPPS re-engaging with the civil
police as political conditions allow. The police continue to
function as the most apolitical of the Palestinian Authority Security
Forces (PASF); ensuring that they can do their jobs will help
improve law and order. We welcome discussions between the EU
and the Office of the President on the possible payment of an
allowance to the Civil Police, and agree with the Committee's
analysis of the risks and benefits of this.
We are actively supporting the development of reform
plans to professionalise and, eventually, reduce the size of the
PASF. In this regard we are providing technical assistance to
the office of the US Security Co-ordinator, who is charged with
leading the international community's response on Palestinian
security, and to the Palestinian National Security Co-ordinator's
team.
[Paragraph 116] A way must be found to repay the
remaining revenues withheld by the Government of Israel. The TIM
offers one possible mechanism.
Following a meeting between President Abbas and Prime
Minister Olmert on 23 December, Israel agreed to release $100
million of Palestinian clearance revenues to President Abbas.
Under the Paris Protocol, Israel has an obligation to transfer
all clearance revenues to the Palestinians. The EU has offered
the TIM as a vehicle to transfer the revenues. However, so far
neither Israel nor the Office of the Palestinian President have
agreed to this.
[Paragraph 117] The European Commission recognises
that the TIM is, and can only be, an inadequate response to the
present financial crisis in the OPTs. We agree that it is a means
of helping the poorest and alleviating the suffering of the Palestinian
people in the short run. The problems we have identified, including
the delays in getting Window I off the ground, as well as the
limited number of civil servants who receive payments, will need
to be addressed when the TIM is extended. In the absence of a
solution to the current fiscal crisis we support the continuation
of the TIM. However we insist that it must be temporary and if
it persists beyond the current year there is very real risk that
the Palestinian Authority may be fatally undermined. This would
set back not only the realisation of Palestinian rights to govern
themselves in the West Bank and Gaza but also the prospects for
peace.
At present the TIM offers the best available way
of supporting Palestinian basic needs and addressing the financial
crisis. To date, it has provided direct support to over 140,000
Palestinians and vital assistance to ensure that basic services
continue throughout the West Bank and Gaza. Donor funding through
the TIM and other mechanisms has played an essential role in slowing
the economic decline in the Occupied Palestinian Territories.
This is now estimated at -9% during 2006, rather than -27% as
was predicted at the start of last year.
We welcome the Committee's support for the continuation
of the TIM. The TIM is due to end on 31 March 2007, but is likely
to be extended further if necessary. Window I is now operational
and deliveries of essential drugs have been taking place since
January 2007. The EU recently removed the wage threshold in Window
III, which enabled an additional 10,000 public sector workers
to benefit. Discussions are also taking place on the possible
inclusion of the Palestinian Civil Police within the TIM, which
would benefit around a further 17,000 recipients. We are assisting
the EC and World Bank to take forward an impact assessment of
the TIM. This will help to further improve the TIM's performance.
We agree that in its current form the TIM is not
suitable for long-term use. However, a modified TIM could usefully
become a bridging mechanism for donor support to a Palestinian
Authority Government that met the Quartet principles until budget
support could be re-established. In addition, we are working
with EU partners on priorities for support to the institutions
of a viable Palestinian state—both immediately and once
we are able to engage directly with the Palestinian Authority.
THE HEALTH SECTOR
[Paragraph 129] The UK Government and other donors
in the international community have indicated that if a Palestinian
Authority, led by or including Hamas, agreed to accept the Quartet
principles, normal funding mechanisms would be resumed. We hope
the Government of Israel would take a similar view. In the meantime,
however, we believe there are humanitarian reasons to exempt the
health sector from the financial boycott of the Palestinian Authority,
especially given the difficulties which restrictions on movement
and access continue to cause for this sector. We recommend that
the UK Government investigate the possibility of achieving such
an exemption. Using existing health provision structures would
be more effective and efficient than the creation of alternative
funding mechanisms such as the Temporary International Mechanism.
The UK has consistently stated that it stands ready
to work with a government that accepts the principles set out
by the Quartet. Until that acceptance is demonstrated through
policy statements or actions, we cannot support the routing of
funds through the Hamas-led Palestinian Government. For now,
the TIM provides the best alternative. It was because of the
importance of the PA as the major health service provider that
PA health workers were the first to receive allowances under the
TIM and that the UK focused its first £3 million of funding
on health supplies. The TIM is directly supporting the same health
workers and providing supplies to the same clinics and hospitals
that previously received UK funds through budget support to the
Palestinian Authority. The TIM is also funding a number of NGOs
providing health care, to offset the cost of referrals from PA
clinics.
DEVELOPMENT ASSISTANCE UNDER CONDITIONS OF OCCUPATION
[Paragraph 130] We agree that under the current
circumstances donors should not disengage from the OPTs.
We welcome the Committee's recommendation. Without
external support, it is likely that poverty levels in the Occupied
Palestinian Territories would rapidly increase. Until there is
a viable Palestinian state able to support itself, and without
substantial improvements in movement and access, there will be
a need for ongoing donor engagement.
[Paragraph 132] We agree that there is an urgent
need for a political solution, and an end to occupation, but consider
that there are interim actions which can and should be taken by
the international community to work towards one. For example DFID
has contributed to the building up of the Palestinian Authority
and other institutions, and has supported the Negotiations Support
Unit, with a view to eventual self-government. Such initiatives
provide opportunities for increased levels of independence and
Palestinian-led development. These are welcome initiatives. Unfortunately,
as we have noted, the current policy of not funding PA institutions
threatens to undo much of the progress which DFID has helped achieve
and increases the risk of collapse of the PA as anticipated by
DFID in its Country Assistance Plan of 2004.
We believe that a viable Palestinian state can only
be achieved through strong public institutions. This is why building
the capacity of Palestinian institutions is a key objective of
our programme. However, we cannot provide assistance to a government
that is committed to violence and the destruction of Israel.
Since Hamas took control of the Palestinian Authority we have
attempted to prevent the decay of PA institutions by working through
the TIM. This provides non-salary assistance to PA front-line
services such as clinics and hospitals and provides allowances
for PA workers. We also continue to work with institutions which
do not report to the Hamas government, such as the Office of the
President, the Negotiations Affairs Department and the Palestinian
Monetary Authority. We are working with the World Bank to monitor
the impact of the current fiscal crisis on PA institutions and
are working to enhance civil society capacity to monitor and evaluate
government performance and advocate and lobby for reform.
[Paragraph 133] It has been reported that the
Government of Israel has released $100 million of the withheld
revenues to the Palestinian President. This is a welcome development.
However there is no legitimacy to the withholding of any of the
revenues and the decision to release only a small part of these
will have limited effect on the crisis facing the Palestinian
economy. Pressure must be placed on the GoI by the UK and the
Quartet to release the full amount due as soon as possible.
The UK, both bilaterally and as part of the EU, has
called for Israel to transfer fully the Palestinian customs revenue.
We welcome the transfer of $100 million of this revenue and hope
that this is a first step towards the full transfer to President
Abbas. As set out in the 1994 Paris Protocols, the customs revenue
is collected by Israel on behalf of the Palestinians.
[Paragraph 137] The existence of the settlements
and the requirement to protect and secure them has created a complex
system of separation under which Palestinians must live. The current
system of closure if taken to its logical conclusion will make
a future Palestinian state unviable. This must not be allowed
to happen. The future of the West Bank and East Jerusalem settlements
should be a matter of priority for the international community.
The constructive engagement approach has not placed it sufficiently
high on the agenda. The UK and the international community need
to reconsider their approach towards the Government of Israel.
The continuing process of establishing settlements
risks encircling East Jerusalem and breaking up Palestinian territorial
contiguity throughout the West Bank. These practices fuel Palestinian
anger, threaten to cut East Jerusalem off from the West Bank and
make it more difficult for there to be a viable Palestinian state.
We continue to call on Israel to meet its commitments on settlements,
as detailed in the Roadmap.
LOOKING FORWARD: THE CURRENT CEASEFIRE
[Paragraph 140] At present there is a stand-off
between a Palestinian government that will not recognise Israel
and the international community which insists on this as a precondition
for even exploratory dialogue on humanitarian affairs, let alone
formal peace talks. Ways must be found to foster a dialogue—incentives
should be offered as well as penalties threatened or imposed if
progress is to be made on the peace settlement.
The UK and EU have made clear that we stand ready
to engage with a Palestinian government that reflects the Quartet
principles. If such a government is formed, the international
community should engage. However, we are clear that the peace
process cannot move forward whilst one of the parties refuses
to recognise the right of the other to exist.
[Paragraph 141] Humanitarian assistance must be
integrated with long-term development planning which seeks to
relieve developmental constraints. To this end the UK must work
with the Palestinian Authority and other relevant bodies to consider
how to rebuild Palestinian institutions and how to restore lost
livelihoods which have resulted from events in 2006 and, importantly,
how to re-establish confidence in the democratic process out of
which Hamas was elected.
We agree on the importance of building the institutions
of a viable Palestinian state within a long-term development framework.
That is why the UK was at the forefront of efforts to support
the PA's Medium Term Development Plan during 2005. More recently,
we have been working through the Governance Strategy Group led
by the EC to define an agenda for reform which we can take forward
when there is a Palestinian government we can work with. The
immediate challenge will be to revitalise systems and processes
which have fallen into disuse over the past year, such as the
Budget process and the Single Treasury Account, whilst also building
Palestinian capacity and consensus around a long-term governance
agenda. We will continue to address the humanitarian needs of
the Palestinian population through our support to the Temporary
International Mechanism and UNRWA as long as is necessary. However,
sustained improvements in Palestinian livelihoods can only come
about through enhanced movement and access and a relaxation of
the current Israeli closure policy, as noted elsewhere in the
Committee's report.
[Paragraph 142] In other situations, ways have
been found of UK representatives talking to those with whom we
have profound and justifiable disagreements because we talk to
them in their capacity as elected representatives, not in their
capacity as representatives of a particular party or faction.
Finding ways of achieving this in this case need not mean a dilution
of the international community's insistence that Israel has the
unqualified right to recognition and security within legitimate
borders any more than our talking to the Government of Israel
means endorsing its continued occupation of East Jerusalem, the
West Bank and Gaza.
The international community is asking no more of
the Hamas-led Government than it has of its predecessors namely:
renounce violence, recognise Israel, and accept previous agreements
and obligations, including the Roadmap. The UK is ready to engage
with any government that is prepared to reflect these three principles
in its policies.
[Paragraph 143] Although we are clear that practical
action needs to be taken now to relieve the immediate crisis in
the Occupied Territories, we are also clear that the Palestinians
have as equal a right to self-determination in a viable and contiguous
state as the Israelis have to peace and security in their own
internationally recognised state. Neither the international community
nor the Government of Israel should underestimate the strength
of commitment amongst Palestinians to such a state. That message
came out strongly during our visit.
We agree with the Committee's assessment.
[Paragraph 144] Palestinian resistance to occupation
has taken many forms over the years. Whilst rejecting violence
as a means of achieving their aims we support the creation of
an independent Palestinian state alongside Israel. The commitment
to a two-state solution is set out in UN Resolutions and in the
performance-based Roadmap drawn up in 2003. The Roadmap was endorsed
by the Quartet and the partners in the Quartet should work more
proactively to achieve it, through talks between the parties involved
and through measurable and internationally monitored steps to
achieve it.
We agree with the Committee's assessment.
Department for International Development
21 March 2007
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