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24 June 2005



International Assistance to the Palestinian People

Office of The Special Envoy for Disengagement, Periodic Report, 24 June 2005

The Special Envoy returned to Jerusalem on Friday 17 June 2005. His trip coincided with that of Secretary of State Condoleeza Rice with whom he met Prime Minister Abu Ala on 18 June.

Rapid Action Programme and Focus Issues


On 20 June, the Special Envoy briefed the donor and UN community and distributed the attached Rapid Action Programme. He also identified from the RAP the following issues for immediate focus:

a) jointly with the Government of Israel and Palestinian Authority:
i. Border Crossings and Trade Corridors
ii. Connecting Gaza with the West Bank
iii. Movement in the West Bank
iv. Air and Sea Ports
v. The Houses in the Settlements
vi. The Greenhouses in the Settlements; and

b) with the Palestinian Authority:
i. The PA’s Fiscal Crisis and the new PA Social Safety Net Program
ii. A Stable Medium-Term Financial Platform for Palestinian
Development; and
iii. A Package of Disengagement Benefits


Six Joint Focus Issues


After a series of bilateral meetings, progress was seen on some of these issues. The parties indicated agreement to the Special Envoy on "door to door" movement at the crossings (rather than the current "back to back" system), the establishment of working groups on the Karni, Erez and Rafah crossings, the establishment of a convoy system linking the West Bank and Gaza in the short term and consideration of the merits of a road link rather than a rail link. Defence Minister Mofaz also agreed to identify roadblocks in the West Bank that could be removed and agreed to the commencement of construction of the seaport and in principle to the reopening of the airport after the IDF completely withdraws from the Gaza Strip. On 20 June, the Special Envoy delivered a letter to Prime Ministers Qu'rei and Sharon confirming these key issues for cooperation and thanking them for the progress made on each of them.

It was reported however that during a bilateral meeting between Ministers Dahlan and Mofaz on the evening of 20 June, Minister Mofaz reverted to maintaining the "back to back" system saying there were technical problems that had to be addressed. Negotiations on all these issues are continuing.

With respect to the settlement houses, the parties have almost certainly agreed that they will be destroyed, in which case the clearing of the rubble remains the main issue. The Government of Israel, in discussions with the Special Envoy has recognized its obligation to remove the rubble but at the same time is unable to commit to remaining in the Gaza Strip for the length of time required to clear it. In addition, it would be difficult to devise a plan whereby all the rubble could be transported back into Israel. The Government of Israel is therefore looking for a third party to clear the rubble. The World Bank is assessing the technical aspects in this regard and in particular whether or not there could be "controlled dismantling" of the houses so reusable parts of the houses could be redistributed, hazardous materials separated out and the rest be used as fill for the seaport.

Compensation remains the key issue in the resolution of the issue of the settlement greenhouses. While reports indicate that the settlers, for the most part, would now be willing to leave the greenhouses intact if they were fully compensated, there is no third party willing to provide that compensation under international law.

Three PA Focus Issues


The World Bank and the IMF are working with the PA on a Fiscal Stabilisation Plan for incorporation into the 2006 budget and are working to address the current deficit in the 2005 budget of approximately USD 400 million.

The World Bank is also working with the Palestinian Authority to refocus the PA's Medium Term Development Plan to serve as a basis for expanded donor financing.

With respect to the package of benefits, the Special Envoy's Office requested the assistance of the LACC to gather information to allow him to identify specific ongoing and new donor programs and projects that will impact on the population immediately following "disengagement”. Specifically, the LACC has requested the donors and UN agencies to provide the following information:

i. estimated disbursements for the balance of the year and if any of those disbursements are currently "blocked" for political or security reasons. The Special Envoy will then work to remove the blockages so the projects can proceed;
ii. new funding which will come available over the next sic months for new projects; and
iii. each donor or agency's "Top Five" projects.

The LACC has also requested that each donor or agency complete and return the attached matrix o the LACC and the Office of the Special Coordinator by 1 July 2005.

Other Issues


In addition to his meetings with officials of the PA and the Government of Israel, the Special Envoy met with business leaders from both the Palestinian and Israeli Communities. He also visited Gaza to assess each of the Erez, Karni and Rafah crossings and the Abu Holi checkpoint – at which he experienced some difficulties in his own movement. The Special Envoy also met with community leaders there to discuss initiatives which could assist in the recovery of the economy post disengagement.

The Head of the LACC Secretariat, Stephano Mocci, recently resigned to become the Special Assistant of the Special Envoy. Fortunately, DFID has offered to second Pauline Hayes, who has considerable donor coordination and governance experience (including in the region) to the Office of the Special Envoy which in turn has agreed to second Ms. Hayes to be the new head of the LACC Secretariat. This link will ensure the work of the Office of the Special Envoy is completely incorporated into that of the LACC and the Palestinian Authority. Ms. Hayes is due to arrive in mid-July.

The Special Envoy attended the G8 Ministerial Meeting on 23 June in London where he received significant support for his mission and progress made to date. From London, the Special Envoy flew to St. Petersburg to meet with Mr. Putin.


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