House of COMMONS










Thursday 5 June 2008


Evidence heard in Public Questions 109 - 153





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Oral Evidence

Taken before the International Development Committee

on Thursday 5 June 2008

Members present

Malcolm Bruce, in the Chair

John Battle

John Bercow

Richard Burden

Hugh Bayley

Mr Stephen Crabb

Daniel Kawczynski

Ann McKechin

Jim Sheridan

Mr Marsha Singh

Sir Robert Smith


Witness: Rt Hon Tony Blair, Middle East Quartet Representative, gave evidence.

Q109 Chairman: Can I say to you, Mr Blair, thank you very much for coming to give evidence. I know there have been some problems with both our diary and your diary so we very much appreciate the fact we have managed to find a slot that is mutually productive. I appreciate the fact you were able to accommodate this slot as it became available. As you know, we produced a report in January last year on the situation in terms of development support in the Occupied Territories and we decided we should do a follow-up because there have been substantial changes since then: there was the creation and collapse of the Government of National Unity, there was the Hamas takeover of Gaza and the subsequent blockade, there is an increase in the number of roadblocks on the West Bank; on the positive side there has been the Annapolis Conference, the Paris Donors Conference and the Bethlehem Investment Conference. We took the view this was an appropriate moment to update the situation, and also your own appointment which is obviously what we are here to discuss today. Thank you for coming in to answer our questions. I wonder if we could start with the situation in Gaza. You will be aware that the Committee did not entirely agree with the Quartet strategy in our previous report, and in particular we said that we thought the treatment of Hamas was not entirely appropriate. What we said was that it was right to place pressure on Hamas to change its policies but dialogue and engagement were better tools than isolation. Indeed, we expressed concern that we would be driving them to a more extreme position which appears to have been borne out: the economy of Gaza has collapsed and Hamas is excluded from the Annapolis peace process. You said to the European Parliament Middle East Working Group that you felt the current approach to dealing with Gaza is, to use your terms, "not a clever strategy". Can you explain what you mean by that, assuming you stand by it?

Mr Blair: I do stand by it. The situation in Gaza is terrible. The humanitarian situation is dreadful for the people there. The vast majority of people in Gaza are people who want to live a decent life but cannot at the moment. What I meant by saying we had to get a different strategy for Gaza was that we had to alter the current state of events fundamentally, and this is what the Egyptians are trying to do in broking the agreement between Hamas and Israel. I have been strongly urging that what we need to do is get a period of calm, get a ceasefire in Gaza and progressively start reopening the crossings, start to get proper humanitarian help through some other goods and services and then build our way back out of this to a situation where the people of Gaza can be helped and, secondly, and very importantly, the situation in Gaza does not disrupt other possibilities of progress. As we speak, as you will know, there is still a very uncertain situation as to whether the Egyptians can broker that deal or not. I hope they can because the current situation will not hold and it is not acceptable.

Q110 Chairman: We had very powerful evidence in John Ging by video link direct from Gaza. At that time on 13 April he pointed out that 344 people had been killed, six of them children, and 756 injured of whom 175 were children. He also, to put the balance, pointed out that 2,600 rockets had been fired into Israel with three people being killed and 20 injured. He made the point that in spite of the restrictions in Gaza the rocket material apparently was still getting in so the blockade was not stopping the rockets but it was causing what he called a "shocking and shameful situation". In that situation, how are you going to move it on? How do you deal with the fact that the Quartet seems to have different approaches? At the same meeting of the European Parliament the Norwegian Foreign Minister, Gahr StÝre, said "Norway talked to the National Unity Government including to its prime minister. The international community could have done more to give that government a chance". In fact, Oxfam and others said legally one has to engage to some extent with Hamas because they are actually responsible for security in Gaza.

Mr Blair: The big question is: what is the right attitude to have towards Hamas. I abide by the Quartet principles, and the Quartet principles are very clear on this point. However, in the particular situation we are dealing with in Gaza, it is important to realise that the issue is not that Hamas are not being talked to, because they are being talked to by the Norwegians, by the Egyptians and by others, the issue is at the moment how do you get a situation where you have a ceasefire so that the rocket and terror attacks stop coming out of Gaza and the retaliation stops coming into Gaza. Without that happening I think it is very difficult to see how we are going to ease the humanitarian situation. Here is the essential political problem. People in Gaza are suffering in the most terrible way, that is absolutely true, but if you are an Israeli politician sitting in Israel and there are 2,500 mortars and rockets falling mostly on one town, Sderot, and where people are in constant danger, where the people are suffering trauma, where just a few weeks back, when I was on one of my visits, there was a massive demonstration outside the Israeli prime minister's office from people from Sderot saying you have to get tougher on the situation. Even though, as I will go on to say, there is a lot more Israel could do, and has to do, not only in respect of Gaza but in respect of the West Bank, it is important to realise that if these rocket and mortar attacks stopped life would be easier. When, as I was, a few weeks back pressing the Israelis to let in more fuel into Gaza and they then go and kill two innocent Israeli civilians who were trying to get fuel into Gaza, it does not create a very easy situation. The politics of this, at the moment, are that until you get a period of calm in Gaza you will not get the space into which a more rational and sensible political discourse starts to happen.

Q111 Mr Crabb: Moving on to the peace process, you described the recent Annapolis Conference as the best chance that all sides in the Middle East dispute have to conclude a deal. In fact, you told a working group at the European Parliament that it is possible to get this conflict resolved I think you said by the end of the year. How realistic do you think the peace process envisaged at the Annapolis Conference actually is given the ongoing conflict between Hamas and Fatah?

Mr Blair: There is a Hamas/Fatah complication but, in a sense, for the purposes of the negotiation, it is very clear that President Abbas is charged with the political negotiation. I think a more complicating factor is what is happening in Israeli politics at the moment, which is obviously more uncertain and that can create a difficulty. Here is my take on it, and I have a different understanding of it than I did when I was Prime Minister even though I used to spend a lot of time thinking about this and going out to the region. My view very clearly is that most people know roughly what a final settlement looks like. That is not to say there are not very tricky issues to resolve: Jerusalem, the right of return, land swaps, precisely the elements of the border. In the end, people are agreed to a two-state solution. If you put five smart Israelis and five smart Palestinians and said go away and produce a piece of paper that says this is the peace deal, what would be amazing is you would find that there was not a vast gap on what people thought ultimately should be the solution. The problem, as I understand it now, is this. What happens on the ground is a vital determinant of whether the political negotiation can succeed, and because both sides have to make compromises they do not feel like making those compromises unless they see the situation on the ground moving towards a political solution. If the situation on the ground is really bad, bad for the Israelis on security, bad for the Palestinians in the weight of occupation, then the political negotiation becomes tougher and that is why I am trying to concentrate on building up Palestinian security capability and trying to lift the weight of the occupation. In my view, if you started to get real movement on both of those things you would pass what I call the minimum credibility threshold for this situation. The Israeli prime minister could say in time you can see how the Palestinians could be a safe partner and the Palestinian president would be able to say that in time you can see the Israelis will get out of our territory and let us run it. At the moment, whilst the weight of the occupation is really heavy and people think it is ridiculous to say this is going to be lifted because we can see all the signs around us that it is not, and when the Israelis are still subject to these type of attacks, it is very hard to get the political negotiation working. My answer to your question would be that it is at any point possible to do a political negotiation but we need to pass that minimum credibility threshold of what happens on the ground.

Q112 Mr Crabb: Is it your view that a sustainable peace deal can be struck which does not include Hamas as a partner?

Mr Blair: If you have a political process going that started to result in real progress on the ground and the shape of the political negotiation being clear, then I think Hamas would have to face a choice. You can agree or disagree about the Quartet principles, and I totally understand the point of view of people who say you just talk to everyone. It is not the Quartet position but I can understand it. However, let us be clear that to cut a deal that has Hamas in it cannot be done unless Hamas accept the existence of Israel. The realistic thing is to get Hamas into the negotiation. The Quartet principles are not foolish in that regard: they are that you accept Israel exists and you have peaceful means of pursuing the negotiation. That is quite similar to what happened in the Northern Ireland situation. I would say it depends on how Hamas deal with the situation if there is real political progress being made. At the moment obviously people are very far apart.

Q113 Mr Crabb: If I can ask you about the role that Hamas is playing on the ground, specifically with regard to the humanitarian situation in Gaza. Are they proving to be a positive agent in terms of helping to facilitate the distribution of aid or are they hindering that? We get frequent reports of rocket attacks on check-points when humanitarian aid is trying to be transferred into Gaza? Are Hamas responsible for that?

Mr Blair: People argue about this but I would say the one thing you cannot dispute is Hamas have a military grip on Gaza and, therefore, my view is if they wanted to stop these attacks they probably could. Maybe they could not stop all of them all of the time but I do not think there is much doubt their writ, in a military and an armed sense, runs in Gaza. That is why I think one does have to put the other point of view the whole time. The fact of the matter is if Hamas stopped and said they will be part of this process on the basis of peaceful co-existence then a whole multiplicity of opportunities would open up for Gazan people and for people on the West Bank. A strategy of deliberately targeting the crossings at the same time as saying to those of us in the international community this is a humanitarian catastrophe you cannot really justify. Although, as I say, I have my own very strong views as to how Israel has to go further and faster particularly on the West Bank, it is important always to recognise they are subject to these terrorist attacks and they do have a genuine security threat. One of the most difficult things about this whole business, which again I have learnt since going there, is what each side says about the other is essentially true: the occupation is hellish for the Palestinians but the Israelis have a genuine security threat from elements on the Palestinian side.

Richard Burden: Before we leave the Gaza situation could I ask you about the specific case of a man who has written to you, and there has been something in the press this week, Wissam Abuajwa. He is an environmental science student who lives in Gaza and has been accepted for a course at Nottingham University but has been prevented from leaving Gaza to take up that course. The Israelis will not let him out and it is not clear why. You said that if Hamas stopped its rocket attacks the situation would transform on the ground but the letter that Mr Abuajwa sent to you indicates that this is his fifth attempt to get out. His first attempt was in 2001 long before Hamas took over, his second was in 2003 again before Hamas took over and also in 2005. Does it not appear that this is not just to do with what Hamas is doing but there is somehow a policy of stopping Gazans getting out even to get education? What, in practical terms, can we do not just to say this is wrong but to stop it happening?

Q114 Chairman: John Ging told us that people were actually dying waiting to get out for medical treatment because they were not getting timely exits.

Mr Blair: This is something that is important we raise with the Israelis and get changed. It is tragic when you get students who have scholarships to come out here and study, or some coverage last week of students who have scholarships to study in America, and people who obviously require medical treatment. Actually both this case and others we will raise with the Israelis and try and get the situation changed. I am not here to defend the blockade. All I am saying is that the situation which we find ourselves in is one in which, in a sense, the ordinary Gazan people - and I have not been down to Gaza myself yet because I need to be sure when I go there not more difficulty is caused than if I do not, but I do want to go when I can. I talked to John Ging; in fact, I met him a couple of weeks back. People like him are really sensible people. They are not in any shape or form other than reasonable, decent people trying to help in this situation. What happens and all I am pointing out, and I am not saying more than this, is the options on the table for the Israeli government are also very limited in this situation because of the pressures they are under as well. However, having said that, there should be a situation where we are able to get humanitarian aid in and we are able to allow people who, after all, only want to come and study. Actually it is to our advantage, in the end, that they come and study because they are less likely to have an extreme view of the world if they are allowed to come and study in Britain and America.

Q115 Jim Sheridan: There are some serious people who question whether or not you are the right man for the job. There is nothing new there.

Mr Blair: I am fairly familiar with those type of questions.

Q116 Jim Sheridan: Given your track record as Prime Minister of the UK and our involvement in Iraq, Afghanistan and our lack of involvement in the Lebanon, there is a serious question mark about your independence, about your neutrality and whether or not the Arab world have the trust in you to deliver the political and financial support that is needed to help the people in Palestine. What tangible evidence do you have that you are independent, neutral and that the people of the Middle East can trust you to deliver the financial and political support they need?

Mr Blair: The Paris Conference in December was supposed to raise $5.4 billion in pledges and we actually raised $7.7 billion so I do not think there is a problem with us raising the money out there. Sometimes when people talk about whether you are independent or not what they really mean is you are too close to America or Israel. As I always say to people out there, the thing about this peace deal between Palestine and Israel is that it includes Israel. Actually I find ordinary Palestinians know that whoever helps them has to have some leverage with Israel and America to be of any use in this situation at all. Although I get a lot of questions from various parts of the media about this, out in Palestine the issues to do with Iraq and Afghanistan and the broader questions all they want is somebody to go and help them sort their situation out. For example, the package which I negotiated with the Israelis a couple of weeks back was the first time the Israelis have sat down and had that negotiation in quite that way, but you need the relationship with the Israelis to do that. That is why one of the things I actually learnt during the course of the whole Northern Ireland peace process is you can go out and start condemning one side and saying it is all their fault but that is basically your exit speech. Once that happens then you cannot work with both sides, and you have to be able to work with both sides. It is not really something I have found that is a big problem there.

Q117 Jim Sheridan: In response to your question to Richard, you said that you have not had an opportunity to visit Gaza which suggests that the trust element is not there yet because of the difficulties you may cause if you go.

Mr Blair: It is more to do with the fact that in a situation that is immensely tense and sensitive, at the moment where these negotiations are going on, frankly it is better to wait and see how they go before you create a situation which may make it more difficult for the people trying to do good down there rather than harm. I see people out of Gaza, a broad range of civic society there. I see them a lot of the time and I talk to the NGOs who are there and it is a question of choosing a moment that helps rather than harms.

Q118 Sir Robert Smith: On a practical point about your role, how exactly do you report back to the Quartet and how do they relate back to you?

Mr Blair: It is not a desperately formal reporting mechanism I have to say fortunately. I speak to the UN Secretary General regularly, to the President of the United States and to Condoleezza Rice obviously, to the Europeans and to the Russians as well. I met the President of Europe just recently and, to be fair, they have been extremely supportive collectively. It may sound not like the ideal quartet of people who ought to have a similar view but basically they have all been very supportive and very helpful.

Q119 Sir Robert Smith: A lot of what we have talked about so far has been about the peace process. I think you would accept that the peace process and trying to bring prosperity are inextricably linked strongly, the one does not come without the other that easily, yet your own remit that you have been given by the Quartet does not include the peace process. How do you really get international aid and development on the ground effectively if you are not integrated into the peace process?

Mr Blair: I would say it is pretty integrated. It is true that in the terms of my reference I do not handle the political negotiation. Again, to be blunt, when you are out there I am talking to everyone all the time about all the issues. The particular part that I am focused on, and that is within my remit, is, in my view, central to this for the reasons I have given. One of the things, for example, that we have agreed with the Israelis in this package which will be, in my view, of really quite profound significance in whether we can move this process forward is for a new way of working around the Jenin area up in the north of the Palestinian Territory. Without going into the detail now, the point is that when you then come to look at a negotiation like that everything comes into it: the politics, the economics, the security. The central thing is if we cannot build Palestinian security capability then the reality is we will not get the Israelis to lift the weight of the occupation. You have to do both of those things simultaneously. Those are the things that, if you can get them done, support this political negotiation.

Q120 Sir Robert Smith: Although the peace process is not part of your remit you have links to those involved in the peace process.

Mr Blair: Yes, and I discuss it with them the whole time. That is not to say I am handling it because I am not; do not misunderstand me. Obviously if I am seeing the Israeli Prime Minister and Foreign Minister and Defence Minister and the Palestinian President and Prime Minister and so on, you do not have a conversation where some things are excluded from it. In any event, as I think I said to people right at outset when I was appointed, if I have to start going through the terms of my reference like a contract and say I can do this and I cannot do that, it probably means that something has gone amiss.

Q121 Mr Singh: A couple of weeks ago you co-hosted the Palestinian Investment Conference which I believe was very well attended by over 2,000 people. Given that attendance, what were the actual outcomes of that conference?

Mr Blair: There were a series of investment projects announced: housing and others as well. It led on from the package that we agreed with the Israelis which include things like a new mobile telephony licence, industrial parks and so on. The most important thing about the Palestinian Investment Conference was that it happened, that people came to it and that the Israelis facilitated it. What I have been trying to say is how we worked, because we were intimately connected with that conference, in setting that up and implementing it is not a bad lesson in how the thing could work if people had the right attitude and goodwill. People came and it was a very well attended conference. Take Bethlehem, for example. I went to stay in Bethlehem late last year and then we made an arrangement with the Israelis somewhat to ease the restrictions in Bethlehem. The tourist and hotel occupancy rates in Bethlehem are now back up to where they were pre Intifada. That is just a small thing which has happened that shows you what could happen if the right attitude and the right goodwill was there, and that has impact on the local economy. That investment conference, where they expected to get several hundred people and got 2,000 people from right around the Gulf region, was a big thing for the Palestinians. Some projects were announced at the conference and it will lead to others.

Q122 Mr Singh: The proof of the pudding is in the eating. What percentage of the projects which were on the table received a firm financial commitment?

Mr Blair: For those projects that were announced at the conference, there was firm money put there. For example, one of the things I was involved in just a few weeks back was putting together the mortgage facility for this housing finance idea which is to offer support for mortgages so that there can be low cost and affordable housing for Palestinians. Our Department of International Development played a very helpful role in that and were a major part of putting that together. That is a $500 million facility which is now there and will probably bring in about $1.5 billion worth of housing investment.

Q123 Mr Singh: On mortgages, could you do the same for the UK?

Mr Blair: That is definitely not my remit!

Q124 Mr Singh: You mentioned a number of projects which received firm financial commitments. Were any of those commitments for the reason of Gaza?

Mr Blair: In respect of the package we put together with the Israelis, some were infrastructure projects. There is the North Gaza Sewage Treatment Works which we have clearance for now. The first phase of that will be completed and the second phase we can put under way now, but it has been incredibly difficult. There is no point disputing the fact that it is very difficult to get things into Gaza at the moment. There is a massive amount we could do in Gaza. If you have a ceasefire, if the crossings started to re-open, if you got some normality back, there is a huge amount of potential there. The other thing that is very frustrating and very sad is the Palestinian private sector. Obviously Gaza has suffered enormously and the West Bank has had its difficulties but these are good business people. They are creative, intelligent able people who are prepared to put real money in, and I think the outside international community is prepared to help them, but they need the situation to ease. One thing that I think is absolutely vital is on the West Bank at least we show what progress there can be if there is a different atmosphere.

Q125 Mr Singh: Do not Hamas see the need for development in Gaza to benefit their own people?

Mr Blair: They do but it is at one level. They have a strong ideology, there is no point in getting away from it, and it is one of the complicating factors.

Q126 Mr Singh: Prospects in Gaza for economic development are very dismal at the moment.

Mr Blair: They are dismal until you get a ceasefire and some normality and calm. If you get some normality and calm, everything becomes possible. For example, if you go back to the Irish situation for a moment, and there are real parallels there, if there had not been a ceasefire and there had not been an agreement that this thing was to be pursued essentially through peaceful means, even with the fact there were still acts of violence, if you had not that basic agreement there and created the space within which the politics, the economics and the social development can work you would never have got a peace deal. That is the problem: whatever criticisms can be made of Israeli policy, and I share the criticism in terms of getting more things in, humanitarian aid, the students, things that Richard was talking about, nonetheless the fact is Hamas are using the situation in Gaza to put pressure on the Israeli government and to provoke the Israeli government. It is not an easy situation either way around. It is important to put both sides of the argument down because otherwise one is not being fair to the situation.

Q127 Chairman: Can I put a comment we had from John Ging about Hamas's involvement in Gaza? We asked him what co-operation or what engagement they had with Hamas and he said "The de facto reality here is that Hamas are in control of the security situation in Gaza. Therefore, it is their responsibility as long as they chose to be the de facto power here to ensure an environment where the humanitarian agencies can freely operate and in the case of ourselves" - that is UNRWA - "they are discharging that responsibility." Could the same be said of the Israeli government?

Mr Blair: Again, if you ended up in a situation where there was a ceasefire there would be absolutely no reason why you should not then be reopening the crossings and allowing the goods and services to come in, and indeed the people and goods to come out. As I say, at the moment some of those attacks are happening on Israelis at the crossings. I have discussed this at length with John as well, as I was indicating earlier, and people like him feel the same frustration. You cannot agree with the effect the blockade has on the people of Gaza but you cannot agree either with the way Hamas operates there. It is a deeply frustrating situation. At the moment there is a discussion specifically around the concept of a ceasefire and building out of this situation which has been conducted by the Egyptians. For these purposes, if you like, there is not a failure of communication or misunderstanding as to what is being asked. The Egyptians, who are well schooled in doing this type of thing, are going between the two sides and talking to both of them and actually talking to the other groups as well in Gaza.

Q128 John Bercow: You are keen to combine large-scale investment and enhanced security with the proposed industrial park in Jenin, potentially, I suppose, acting as a trail-blazer for this purpose. Can you tell us, what is the timescale envisaged for that particular industrial park?

Mr Blair: In Jenin there are a whole series of small-scale projects that we are getting underway now and then there is one large-scale project, which is the industrial park around the Jalame crossing. There is basically an agreement for this now. The German Government is providing the money for the infrastructure. I was up at the crossing just a few weeks back. I think they think this can be got underway very quickly, within months, and the interesting thing in this - it gives you a slightly different picture of the situation and what is possible - is that when I then crossed into the village on the Israeli side, where you have got Israelis and Arabs living in the same village, you have got an Israeli mayor, an Arab deputy mayor, and I conducted the conversation with the Israeli mayor with the interpretation being done in Hebrew by the Arab deputy. Here is a situation where, basically, they live completely peacefully with each other. They both support this industrial park at Jalame. The actual border has been open more so that Arab Israelis can go into Jenin, and this is going to make a difference in Jenin. The Jalame industrial park could be underway within months.

Q129 John Bercow: I think we all want to be optimistic about it, and it might well be justified to be, and what you have just said is potentially quite encouraging, but I think we could not allow a discussion on this point to conclude without some reference to the fact there are sceptics, and there are sceptics numbered amongst those who have already given evidence to us, to whose scepticism and doubts I would be pleased to hear your response. Specifically, the Portland Trust has said these projects of themselves, though potentially valuable, are not novel; there is some track record of such initiatives being tried and they have tended to founder on precisely the issue of strategic checkpoints, roadblocks, et cetera. I note what you have just said about the border, but with reference to the four strategic checkpoints in particular, do you detect, and can you report to us, progress in removing them on a permanent basis?

Mr Blair: First of all, the sceptics outnumber the optimists very considerably in this situation, as I discovered. On the other hand, to be blunt about it, there is not much point in just sitting and moaning about the situation; we have got to try and change it. We have actually chosen the industrial parks carefully in order to minimise the potential problems around either checkpoints or security. So at Jalame there is not really a problem, at Tarqumiya, down in the south near Hebron, where we are still debating the precise site, but that will be situated in or around the border there, the Jericho agro-industrial park, I think, once the feasibility study is completed, should go ahead and actually some of the housing projects that Portland Trust and others are working on, there is now no reason why they should not go ahead and they can go ahead. The four check points that we have asked the Israelis to remove, one of them has been removed - that is the Kvasim one which is down in the south near Hebron. There are another three that we wish then to remove over the coming period of time, and that they have agreed, in principle, to do. One of those, Shave Shomevron, is around the Jenin area and will actually allow greater access between Jenin and down into Nablus. There is then the container one which is around Bethlehem and there is the Halhul Bridge one, which is just north of Hebron, and here is the point about the checkpoints and roadblocks. People talk about over 600 of them, and so on, and it is true, there are very significant numbers, but actually if you look at any sensible map of where these checkpoints are, the real problem for the Palestinians is not so much the checkpoints that stop them getting access into Israel, the real problem is those which block the arterial routes going down from the north to the south and out to the east, out towards Jordan. What we are concentrating on (and there are actually not large numbers of those very strategic checkpoints and roadblocks, probably a score of them) is progressively to remove those. We have asked four to be removed. We have actually wanted another six or seven upgraded, because some of it is that people just wait far too long. Ultimately, that is not a substitute for removing them, and they have got to be removed, do not misunderstand me, but the reality is that, at least for the time that they will remain, if the access was improved, that would make a big difference. If you like, the four that we have identified to be removed go more or less north to south, and if they were removed it would shorten significantly, dramatically actually, the time it takes to get from north to south and, therefore, that eases business, it eases restrictions on ordinary Palestinian people.

Q130 John Bercow: Are guarantees being offered to reassure investors specifically on the subject of the security and speed of access to, and egress from, those industrial parks for the purposes of delivering supplies?

Mr Blair: Yes, absolutely, and that is the critical thing. For example, up in Jalame, there is no real security problem in and around where the industrial site is. Obviously they can go straight into Israel and out to the port or, alternatively, they can go down towards the Allenby Bridge and out the Jordan way. In the Jenin area, which I know we will come to in a moment, the whole purpose is that the Palestinians provide their own security capability and gradually over time then they take charge of that chunk of territory, and the actual Jenin project, the Jenin area that we are talking about, is an area in geographical terms slightly bigger than Gaza, so it is not an insignificant geographical space.

Q131 Richard Burden: You have emphasised, on a number of occasions, the importance of maintaining and building on relations with both sides - that if both sides do not trust you it is difficult to move forward - but if I have understood you right, you have also indicated that there are some bottom lines that are important. A bottom line that you have particularly emphasised to the Palestinians has been the importance of maintaining, in practice, the rule of law. Would that be reasonable?

Mr Blair: Yes, absolutely.

Q132 Richard Burden: Does it apply to both sides as a bottom line?

Mr Blair: Yes, it does. I have agreed a package with the Palestinians and with the Israelis. The one on security, we will probably go through a lot of the detail of that and how it is going to be properly funded over the timetable at the Berlin Conference the end of this month, but the Israelis and I have agreed package of measures. If that package is implemented over the next few months, that will make a significant difference on the ground. If it is not implemented, then that will be a breach of the undertakings that were given.

Q133 Richard Burden: Perhaps we can come on in a minute to talk about the package, but I am just trying to establish the bottom lines on which the packages are built. As far as the Palestinians are concerned, you said that the rule of law, both domestic and, I guess, international, as applied to Hamas - not, "You should not fire rockets over the border at someone else's people" - is a bottom line. In relation to Hamas it even stops a discussion with them, let alone an agreement with them, unless they abide by international law. My question is, does that apply as a bottom line to the Israelis as well as to the Palestinians?

Mr Blair: The Israelis should abide by the law too, of course.

Q134 Richard Burden: Is the occupation legal or illegal?

Mr Blair: The problem with looking at it in that way is here is the difficulty the Israelis have, and it is important to realise this. We can talk about the illegality of the occupation, and so on and so forth, but we do not actually get to where the hard politics of this is. Everybody wants to see the occupation lifted. It has got to happen. However, and this is the brutal reality from the Israeli point of view, no Israeli politician is going to depart from this view whoever, in any subsequent election, is elected Israeli Prime Minister unless it is clear that on the West Bank there will be the rule of law by a Palestinian authority with whom they have got an agreement for peace. One of the things about this situation which if we are going to solve it we have got to do, is to recognise this problem. Again, as I say, I do not sit here as the person speaking for the Israelis, but it is important to recognise it from their point of view. They think they got out of Gaza, they took their 7,000 settlers with them and they let the Palestinians run it, and then they think they get a whole lot of attacks. We can all debate the unilateral nature of that and why it was not done properly, and so on and so forth, but that is their mindset on that. When it comes to the West Bank, therefore, they need to know that if the IDF get out of the West Bank you do not have armed militias going into it or taking control of it. That is why building Palestinian security capability properly is absolutely central, that is why Jenin is important, because, for the first time, we are doing this in a different way; there are then Palestinian forces being trained in a different way in Jordan that are going to be forces capable of exerting that rule of law, not in the situation where people are engaged in ordinary criminality, but where people with weapons try to challenge the legitimate authority of the Palestinian state.

Q135 Richard Burden: I put that question to you not to make an academic or debating point but to lead on to some issues of practicality, the first of which would be that, if there is going to be trust, then do you not feel that sometimes on the Palestinian side there may be a perception of double standards. It is not that practicality is not important on both sides, but international law is a bottom line for the Palestinians, with the Israelis it is a bottom line but it depends on the political situation at the time, but that might actually undermine the degree of confidence. I suppose the second thing is, if actually there are certain things going on in the West Bank that are illegal under international law - settlement building, the wall where it is built on Palestinian territory rather than down the green line - and you are intending to negotiate ways often around those problems, it could be said that in some circumstances there is a balance to be drawn about at what point you are actually easing restrictions on the ground to enable economic development, furthering the peace process and lifting the weight of occupation on the Palestinians and at what point that transfers through to saying, actually you get to a situation where the Palestinians are there in Annapolis, they have got a road that can get down to Ramallah, you can have some trade going on there, you have got the transport continuity between areas, but you have still got the settlements, you have still got the West Bank divided up into different cantons and you move away from the idea of a contiguous Palestinian state to a continuous transportation one. Is that a problem? Is it a problem for a villager who does not live on an arterial route who has to get through one of those little checkpoints in order to get there?

Mr Blair: Yes.

Q136 Richard Burden: And if it is a problem, what mechanism have you got for dealing with that and assessing what you are doing?

Mr Blair: Yes, it is a problem. Since I have tried to be fair to the Israeli side, let me be fair to the Palestinian side. If Prime Minister Fayyad was sitting here, and he is a totally good guy, a really sound person, someone who wants a two-state solution, is as tough on terrorism as any of us, he would say to you, "Look, the fact is the Israelis could and should be doing much more", and I think it is necessary for Israel to do more and to go further; and the answer to your point is, yes, if all you do is some economic and social development and it is not put alongside lifting the occupation and making a political final settlement, the deals, with also the settlements issue and the outposts, some of which are illegal under Israeli law, never mind international law, of course, that will not work. That is why I say you have got to integrate these things together. You have got to have the politics, the security capability of the Palestinians and what happens on the ground in an economic and social moving in the same direction. But, no, of course, what Palestinians feel is that there is a genuine double standard on the part of the West. They feel that - there is no doubt about that - but what I am trying to do is to say: how do we work our way out of it, and where I think it is important to try and change the reality on the ground is that that is the only way you are going to get a political deal in the end. It is quite a hard thing to say this, but I think it is my sense of the political reality. Unless Israel is sure that a Palestinian state will be a safe partner, it does not matter how long you sit in a room looking at maps and negotiating, they will not agree it. On the other hand, it is my actual genuine belief, and this is the importance of building their capacity, their governance, their security capabilities, as Prime Minister Fayyad is trying to do, if the Palestinians do that, then my view is that the Israelis know that in the end, for their own long-term security, a Palestinian state is the only option. As I say to people, if the alternative to a two-state solution is a one-state solution, then there is going to be a hell of a fight.

Q137 Richard Burden: It has been suggested that there should be a mechanism on a project-by-project basis for just determining whether a project is taking things forward or whether it is getting round international law. Some kind of mechanism for assessment should be in place. Is there one, would you consider one and, if so, who would do it?

Mr Blair: To be honest, I do not really think that is where it is. I think the single thing that people would ask me if I was in Palestine right now is: "That package that you agreed with the Israelis sounds good. Is it going to be done?" That is the only question they would ask. If you are waiting two hours at a checkpoint every day, if you can bring that down to 20 minutes, that makes a big difference to their life; if you can remove it altogether, that is even better; but we have got to proceed in a way that is geared to the reality. I think for most people on the Palestinian side they are just desperate to get the freedom back in their lives to start making something for themselves and their families and, therefore, I honestly think that the most sensible thing is not to introduce a new mechanism, but the reason I negotiated this in such detail with the Israelis over many weeks and really got down to the detail of it is that it is now there on the table as the test of whether things are going to happen or not.

Q138 Daniel Kawczynski: Mr Blair, could I ask you about the Quartet's development proposals for the Jordan Valley and, in particular, these agro-industrial zones. What sort of standing do they have under international law?

Mr Blair: In what sense exactly?

Q139 Daniel Kawczynski: In the sense that obviously this is a disputed area, a disputed territory, and you are allowing Israeli firms to set up there. It could be perceived that this is a way in which the Israelis are getting a strangle-hold on the area and legitimising their presence there by creating these industrial zones.

Mr Blair: The idea of an agro-industrial corridor around Jericho is an idea that has been taken forward by the Japanese Government. They have done a lot of work on this and are prepared to put investment into it. The idea is primarily how the Palestinians do this. The problem that we have negotiated our way round, I think successfully now but time will tell, and this is maybe what you mean by this, Daniel, it is in part going to require a use of Area C. This is really important for the Palestinians, and actually I think it is as important as anything else, and it does not get the profile or the coverage that it should. Sixty per cent of the West Bank is in Area C and Area C, under the Oslo Accords, is under Israeli administrative control. The real problem for the Palestinians is that, even though a large chunk of that is along the Jordan Valley, which they should be allowed to develop, they find it very hard to get a development there. So the idea of the agro-industrial corridor around Jericho is so that Palestinians - there will be some foreign investment but it will be mainly Palestinians - get the chance to engage in what is very easy trade to do there, and because it is quite close from Jericho to the Allenby Bridge, we have now agreed with the Israelis a longer route, bidding for the Allenby Bridge, then they can get the goods out via Jordan and then they have not got the same problems in trying to ship them back through the ports on the Israeli side. I do not think there is really issue about international law, but there is this issue to do with Area C and whether some of this will be sited in Area C and whether we can use part of Area C as an access, because you will have to go across Area C to get the proper access from Jericho to the Allenby Bridge.

Q140 Daniel Kawczynski: So you envisage that these industrial zones will be primarily populated with Palestinian businesses?

Mr Blair: I think around the Jericho area, although there will be others too, but it will be primary for Palestinian business.

Q141 Chairman: Should it not be exclusively Palestinian business, in the sense that if these are filled up with Israeli companies that actually will be at the expense of Palestinian business opportunity?

Mr Blair: I do not think that is the anticipation at all. What I would say to you about that is it is probably for the Palestinians to decide themselves, because sometimes they may want to do some joint ventures, but my understanding is, basically, for the vast bulk of these industrial projects there will be international investors, there will be Palestinian investors. There may from time to time be Israeli investment as well, but that will be on the basis that the Palestinians want it and agree, and sometimes you will get a situation where they do genuinely want it. The other thing that is quite interesting is that there are Israeli business people who are very much on the same line as we would be talking about and who themselves want greater access of movement in order to be able to do business.

Q142 John Battle: Our committee is International Development, as different from Foreign Affairs, and I mention that because the first reason that this committee took an interest in Palestine in 2002, and why we went there, was because of the poverty indicators for the Palestinian people being lower than some of the countries of sub-Saharan Africa. For example, on water and sanitation, to take a very practical point, the Palestinian people are further behind in access to clean water and sanitation than the people of Sierra Leone. I wondered if I could pass on a practical possibility. The Quartet did a report on projects and referred to water treatment, but when we met with the Negotiation Support Unit, they said the real focus, particularly in the Jordan Valley, should be access to ground water resources. Do you know, is there any movement on that? Secondly, and I know that you have done some work on waste water management to get equipment for waste water processing, sanitation, into Gaza, for example, apparently the equipment is stuck at the checkpoints. Is there any progress on that very primary, basic access to water? I fail to understand how you can have agriculture without water, but you cannot have living without it either.

Mr Blair: No, and this is where you get into the short-term versus long-term that Richard was talking about earlier. We have now agreed with the Israelis for provision for about 12 of these infrastructure projects to go on - water and sanitation projects - and the Palestinian Water Authority are now taking those forward, but there is a longer-term question, which is what is going to be the agreement about the use of water, particularly along the Jordan Valley, and that is in this Area C territory which is part of the final status negotiation. In the meantime, again, there is much more that could be done there. That is why I would say that Israel could do more to help in this situation. In respect of Gaza, I think the equipment has now gone in but we have been going to and fro and to and fro on this the whole time. There was a time when there was a problem getting the cement in. I think the cement is now in. There is also a Phase II of the project. We needed a letter of agreement from the Israelis so that we could tender for that project. I think that has now been done, so that project will be completed, but let us be clear, it will be completed in circumstances where at the moment there is still raw sewage being pumped out on a daily basis and it is an appalling situation. I do not conceal that at all.

Q143 Ann McKechin: You spoke a great deal this morning about changing the reality on the ground. About 18 months ago when the committee visited the West Bank we attended a border cross point at Hawarrah, which was, frankly, a chaotic crossing for Palestinian goods vehicles, was highly inefficient and was actually, frankly, insecure for the Israeli soldiers who were trying to man it. Yet Israel is one of the most sophisticated defence electronic engineering manufacturers in the word, and there is no lack of capacity in Israel to actually put in very sophisticated border points of the type that existed in Northern Ireland before the troubles ended. What is really happening, seriously, in the negotiations, and do you believe there are ways of doing enough to improve the technology at the border crossings which they say are vital for their security?

Mr Blair: In respect of those checkpoints that we agree the Israelis should upgrade significantly, Hawarrah was one of those checkpoints. You are absolutely right, there is a lot more that could be done, and that is what should happen. There is a package that has now been agreed with the Israeli Finance Minister as well in order to fund proper equipment. When you visit some of those checkpoints, it is a small but significant investment and it could make a huge difference. I know people say that is not really what should be happening, they should be lifted, but I think the reality is that with some of them they are going to stay for a time, at least, and what is important is that they are significantly improved; but, yes, we could do that, and that is precisely one of the things that was in our package.

Q144 Ann McKechin: You mentioned earlier improvements in the tourist industry in Bethlehem. Could you tell me which checkpoint is going to be used for tourists, and why would this be a different one and a better one than that for the ordinary Palestinians who have to try and get in and out of Bethlehem every day?

Mr Blair: Again, that is a good point. Why should it be different? The reality is that at the moment when the wall is there and you have got a situation where there are long queues of people to get in and out, it actually matters to have a fast-track for tourists, so that is what we are doing, because it helps, but in time to come, obviously, we want that apply to ordinary Palestinians too.

Q145 Ann McKechin: Should you not be applying humanitarian standards that if you are sick, if you are ill and disabled or elderly, you should have first access rather than someone who is fit or healthy and cannot stand for two or three hours in the sunshine when it is 95 degrees?

Mr Blair: Of course. Again, one of the things that we are in discussion with the Israelis about (and this is part of how we change the situation) is to start discriminating and differentiating between your ordinary person and the person who is in chronic need. Again, the reality is that for the moment you will not stop there being a checkpoint on that part of Bethlehem going into Jerusalem - that is not going to happen - but certainly people should be allowed swifter access for humanitarian reasons and, in any event, it is important for the tourist industry because, as a result, as I say, of what has happened in Bethlehem over the last few months, the tourist industry is significantly revived there and that is important. Overall, what is happening to the West Bank economy (and, again, I say all this against the background of the fact that Gaza is in an extremely difficult situation for all the reasons we have just been through and not enough is being done to help the West Bank economy), it has gone from a contraction but it is now growing. In fact, the overall World Bank projection for Palestine this year is three per cent, and that includes Gaza. The truth is, if we manage to get these restrictions progressively lifted, you could get that figure up to probably ten, 11, 12 per cent, and then you would be starting to see a real change for people, and that will make a huge difference to them. It is a very difficult thing to say, and we found this difficulty with the Bethlehem Investment Conference: on the one hand you have to admit the situation is extremely difficult and challenging; on the other hand you do not actually want to say to people, "Do not come here. Do not come and invest", and the truth of the matter is in many ways, because of what Prime Minister Fayyad has been doing, there are elements of the Palestinian economy that are improving, it is just that so much more could be done and should be done.

Q146 Chairman: We are close to the end of our session, but I hope it is acceptable to you if we take a quick supplementary from Stephen Crabb and some questions from Hugh Bayley.

Mr Blair: Yes.

Q147 Mr Crabb: It concerns an issue we have not touched on this morning. The Israeli Government, I understand, recently announced they would increase by 40 per cent the number of Palestinian workers allowed to come and work back in Israel. How quickly do you envisage that becoming a reality on the ground and, longer-term, seeing the return of really significant numbers of Palestinians working back inside Israel, as they used to, and the rebuilding of some shared economic interest there?

Mr Blair: One, it is important, because it helps the Palestinian people; two, I think it is important and, again, this is part of our agreement with them) that some of those people should be able to overnight there, and so on, because it is important for their work, and three, yes, in time, I hope that then improves and increases. That is where, again, Jenin is important, because there are now people coming across the border and into Jenin for the first time in several years. So that is important to do for sure.

Q148 Hugh Bayley: What security outcomes would you expect to see from the Berlin Conference later this month?

Mr Blair: I think Berlin is really important; it is a very important moment, and I think we need the following. We need, first of all, a proper plan for the Palestinian security forces, both for their training, their equipping and their reform. Secondly, we need the European POP proposals, which is for the civil police to be implemented. Thirdly, we need the proposals for prisons and courts and judicial reform to be set out and funded and then implemented, because the security picture is not just about people with weapons taking on other people with weapons, it is also about other procedures for prison, for courts, for prosecution, for the whole panoply of measures associated with the functioning of the criminal justice system.

Q149 Hugh Bayley: What particularly would you expect the Palestinian authority to agree to in order to create the sort of situation which, as you described earlier, would enable Israel to lift the occupation or take steps in that direction?

Mr Blair: They need, and I think they will, to be fair, to agree to the reform of those security forces as well as their proper funding and equipping and training, and they need to be in a position where in a few months time, building out from what is happening in Jenin now, we can then take another area and start to do the same, and this is the purpose of the strategy we have outlined. This is very difficult for the Palestinians, because sometimes they are taking on people that they have been alongside in previous times, but the fact is a state is not just a geographical territory, you have to have one rule of law, you have got to have one authority, you have got to have one proper system of law enforcement, and for the Palestinians this is where the work that President Abbas, who is also very committed to this, and Prime Minister Fayyad are doing is so important. It has got to happen. This has really got to happen.

Q150 Hugh Bayley: In any negotiation (and you know this from Northern Ireland) a step taken, a statement made by one side, needs to be reciprocated. You have already said that the Israeli security apparatus has a devastating effect on the quality of life for Palestinians and, rightly or wrongly, tends to fuel feeling of desperation and anger. So how can Israel be persuaded to make specific changes to their security apparatus in order to improve the lives of Palestinians and create conditions for progress with the peace negotiation?

Mr Blair: I think that they can be persuaded to do that because I believe that, as I say, the majority of sensible Israelis know that there is no alternative to a two-state solution but a big fight continuing over a long period of time and throughout the whole region. So I think that most sensible Israelis know that a two-state solution is there. Again, the impact of the Intifada and the breakdown of the negotiations between President Clinton, Prime Minister Barak and President Arafat a few years back has been to leave the peace camp in Israel feeling it does not have a lot to go on, and rebuilding that confidence is very important. What I actually think about this situation, which is why calming and helping Gaza is so important, is if you have just got sufficient time and space to show that things could happen, you could get a momentum established that would accelerate quite quickly. This is what I find very frustrating. I am absolutely convinced that if everything else remained calm, let us say we got on with these economic and social projects, it would make a big difference over a period of time. The trouble is everything else is not going to remain the same. So the point about it is that, if we were able to rebuild some confidence and if people felt there was a real strategic grip on this situation, namely we have a political negotiation that is meaningful, we have a security capability built amongst the Palestinians that does the business and we have genuine change on the weight of the occupation without Gaza disrupting it, you could start to move this situation and you could move it, I think, quicker than people think, but all of those things is an open question at the moment and that is why it hangs in the balance and certainly, I think, is why it is natural you should start with Gaza today. I think the danger of Gaza is not just the terrible situation for the people but that it is used, in a sense, to overwhelm anything else that might be good that is happening. I am not naive about this. I know that if I built an industrial park up at Jalame but meanwhile Gaza is in turmoil, for your ordinary Palestinian they are looking at one state. They are not looking at two states - Gaza and West Bank - they will get one state. They feel a sense of responsibility and solidarity with their people.

Q151 Hugh Bayley: I agree, from my visits to the region, that a majority on both sides want peace, and the only prospect for that is to have a two-state solution, but the majority who want peace are marginalised time and again by acts of violence, whether it is a missile being fired over the border into Israel or the use of violence by the Israeli security forces. You can take the parallels with Northern Ireland too far, but it was undoubtedly the case in Northern Ireland that community groups on both sides - the Falls Road and the Shankhill - started saying, "We want peace", and they reduced the political space within which the terrorists operated. You have talked about a series of high-level talks you are involved with, but I think there is a need to nurture and strengthen community organisations of moderate Palestinians and moderate Israelis to try and nurture that space for discussing a future of co-existence. To what extent would you like to see DFID and other donors working in this area and what should they be doing?

Mr Blair: I think it is a very worthwhile exercise for them to work on. If you take an organisation, for example, like One Voice, which is for the young people, who are lovely young people, if that is the future on both sides it would be bright. I think it is very important to encourage a sort of civil society exchange at the same time, and I think that those are things that are easy to do and very worthwhile.

Q152 Chairman: Thank you. Can I perhaps draw two threads together and conclude this session. I think as far as Gaza is concerned, the comments that you and others have made, for the people of Gaza, they are looking to the international community for their humanitarian rights, not for the consent of Israel or Hamas or anybody else. So what is left on the ground is what more will we be able to do to actually deliver what the people of Gaza have a right to expect from the international community? In relation to your project, particularly in the West Bank, it has been expressed to us that there is a danger of legitimising the facts on the ground. Nobody is questioning the intention, but actually, effectively, creating almost two parallel universes: a network of Israeli settlements with their own communications, and a new network of new Palestinian developments with their own parallel communications, neither of which meets, which I think many people would feel was taking us further away from a two-state solution. In that context, in terms of the agreements you have negotiated, do you think that they have more chance of previous access and movement agreements which have not actually been fulfilled? We sat in probably the same hotel as you did in Bethlehem just before Christmas, the year before last, with two per cent occupancy and I think many of us reflected on the fact that the first Christmas there was no room in the inn; here we were in Bethlehem with an inn full of rooms and nobody in them. You say you are going to unlock that but it has to be in ways that benefit the people of Bethlehem and not just the people of Jerusalem.

Mr Blair: In that hotel where I was two or three weeks ago, the hotel occupancy is now over 40 per cent so it has changed. There are changes that are there. You know this issue about legitimising the occupation, to be absolutely frank nobody on the Palestinian side has ever put this to me as a serious point because I think they understand very well. Yes, of course, in the end they want the settlements out and the outposts away, and so on and so forth, but they do not ignore the fact that if you can get economic projects going and open up some of the access within the Palestinian side that is obviously of enormous importance and help to Palestinians. I would go back to the central point about all this. A strategy for resolving this has all the different bits of it operating in an integrated way. In other words, if you take the politics but do not take the security, it will not work. If you take the politics and the security but there is nothing happening to give the Palestinians hope on the ground, it will not work. If you leave Gaza as it is, there is a danger that Gaza, quite apart from the misery of the people there, overwhelms everything else. My response would be that I would never suggest that building an industrial park or new houses or municipal projects is a substitute for the politics, the security or sorting out Gaza but I do think it is an important part of it. I also think for ordinary Palestinians, and again there are parallels here with Northern Ireland, the greater the chance of prosperity the greater the stake people get in a fledging peace process. The other thing to remember about Palestine is the age of the people. I forget the precise percentage but the majority of the people are under the age of 25 in the West Bank and Gaza. If these young people start to think they have a chance of a job then that is the best way you can start to diminish some of the contrary forces that are pulling them into extremist groups that, in the end, do not offer them any way forward at all. I think everything should be put together and the single most important thing for the international community, including America, is just to focus the whole time on it. One of the things that is really important is that through to the end of the year, and into next year when there is a new American president, the focus is kept on this all the time and not to diminish it in any shape or form. It would be a real problem if the new American president takes a couple of years to work their way into this. One thing I am absolutely sure of is this issue is even more important than I thought it was when I was Prime Minister of this country. It is fundamental to sorting out the region, it is fundamental to peace between the world of Islam and the word of the West and it is fundamental, obviously and most importantly, to a decent future for Israelis and Palestinians.

Q153 Chairman: As an International Development Committee rather than a Foreign Affairs Committee, our concerns are for the plight of the people and their potential. Our frustration is frankly if there were peace there would be no need for any International Development support for the people of Palestine. That is our fundamental frustration and the money could go to the people for whom it is required.

Mr Blair: That is what the Palestinians would want too.

Chairman: If you have any reflections on the exchanges we have had, we will be producing the report before the summer recess so I hope you will feel free to comment because sometimes things occur afterwards. Thank you again for enabling us to have this session, and particularly for accommodating this particular date given that the Committee were due to be in China but because of the earthquake we are not.