Bush Pushing Israel on Terms Of Disengagement From Gaza

By Ori Nir

Published June 18, 2004, issue of June 18, 2004.
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WASHINGTON — As Israel prepares to withdraw from Gaza, the Bush administration is laying down a stiff series of expectations that could set the stage for a rocky few months between Washington and Jerusalem, pro-Israel activists say.

President Bush expects Israel to start taking steps to rehabilitate Gaza’s shattered economy by setting up mechanisms to allow Palestinians to export goods by air and sea and facilitate the passage of goods between the strip and the West Bank. The administration also told the Israeli government that it expects quick and decisive action to dismantle the unauthorized settlement outposts in the West Bank, as Prime Minister Sharon promised Bush in their White House meeting in April.

The expectations provide much potential for friction. In the past, Israel has responded to terrorism emanating from Gaza by sealing off the strip, severely limiting residents’ ability to trade with the West Bank, Arab neighboring states and Europe. It also has backed off plans to dismantle outposts when settlers have protested the moves. While this week, Israel lifted some 40 roadblocks in the West Bank, allowing more freedom of movement, violence could halt Jerusalem’s moves toward disengagement, even as Bush seeks to demonstrate progress in Arab-Israel peace-making as he attempts to get America’s European allies more involved in Iraq.

“Progress has been too slow,” an administration official said. “There has to be visible progress made [by Israel], and there must be serious planning to make sure that Gaza can function [after Israel’s withdrawal].”

Pro-Israel activists said they expected the administration’s push to intensify after Israel’s attorney general announced Tuesday that he would not be indicting Sharon in a bribery scandal, securing his political future. The development opened the door for Israel’s chief opposition party, Labor, to join Sharon’s coalition in a national unity government, talks toward which also started this week.

According to American officials, the administration assumes that after the disengagement, Israel will reduce its trade with Gaza dramatically. It also will reduce drastically, and eventually terminate, the employment of Gazan day workers in Israel. Work in Israel, which a decade ago was the Gaza economy’s main source of income, is now negligible. In September 2000, before the current Palestinian intifada started, more than 30,000 Gazans worked in Israel and in Israeli industrial plants on the strip’s northern border. Now, fewer than 4,000 of Gaza’s 1.4 million residents work in Israel. Israeli officials have said publicly that they intend to reduce the number to zero, in order to minimize security risks.

A World Bank report on the future of Gaza’s economy, commissioned by the international “Quartet” seeking Israeli-Palestinian peace, also assumes that Gazans no longer will be employed in Israel. Sources familiar with the report, which is slated to be published next week, said that easing the “restricted access” of goods in and out of Gaza will be the key to any economic recovery there.

“Access to Israel, Egypt, the West Bank and the world is vital,” a World Bank official said. The official explained that as a result of the sharp reduction in income from employment in Israel, Gaza’s main economic lifeline now is external help, mainly in the form of financial grants from foreign governments to the Palestinian Authority and humanitarian aid from the United Nations and other international agencies. Those payments total almost $1 billion annually for the West Bank and Gaza combined.

An increase in international cash support for Gaza seems both implausible and undesirable to the World Bank, because that would increase the strip’s dependence on foreign aid, World Bank sources said. The World Bank recommends, instead, that the private sector regenerate the local economy. Entrepreneurs could expand Gaza’s modest agricultural export sector (mainly flowers and citrus) and start new, export-oriented industries, with international subsidies attracting both local businessmen and foreign investors.

Such a plan, however, necessitates internal security and a high degree of stability in Gaza’s relations with Israel.

“Security, as always, is the weak link,” said a World Bank official. “If there is security, Israel could be expected to ease access” for trade, and potential investors would be less leery of investing in a volatile place such as Gaza, he said.

Security and economic steps to prepare for the pullout will be discussed at a Quartet meeting later this month, in the Middle East. The exact time and place has not yet been decided.

American, European and Arab diplomats are pointing out that while Israel has been slow to take steps on the ground to improve living conditions for Palestinians in the West Bank and Gaza, other countries have started taking action. Egypt has started training and reforming the Palestinian Authority’s security services in order to secure its border with Gaza. Israel’s chief of intelligence, Major-General Aharon Ze’evi Farkash, told the Israeli cabinet Sunday that Egypt is playing “a very positive role” in facilitating the plan. Jordan also has sent security experts to the West Bank. Both Egypt and Jordan are putting pressure on Palestinian Authority Chairman Yasser Arafat not to obstruct the implementation of the plan. Arafat this week issued a decree to start preparations for municipal elections in the territories, which Washington and its allies endorse.

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