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As Gaza Withdrawal Approaches, Bush Adamant on Palestinian Funds

While Congress considers what U.S. assistance, if any, the Palestinians will receive when Israel withdraws from the Gaza Strip this summer, President Bush is adamant about making sure some cash is on hand to ease the way to full Palestinian sovereignty. Delegates from the U.S. Senate and the House of Representatives launch meetings this week to reconcile their versions of a fast-track appropriations bill that earmarks $200 million for the Palestinians.

Both houses have included tough language demanding oversight and restrictions on direct assistance to the Palestinian Authority. Senate negotiators want to remove language in the House version that takes away the president’s right to waive those restrictions; House negotiators, unhappy with the pace of P.A. reforms, may try to introduce even tougher restrictions.

Whatever happens, Bush is determined to make sure that P.A. President Mahmoud Abbas — due to visit the White House at the end of May — gets cash, even if it doesn’t come directly from the United States.

Bush made Saudi financial assistance to the Palestinians a priority in talks at his Texas ranch this week with Saudi ruler Crown Prince Abdullah.

“I did discuss with the crown prince the need for everyone to support, including financially, the Palestinians as they move forward,” Secretary of State Condoleezza Rice said Monday. “I think as the international community comes forward with a plan of support for the Palestinians, I would expect the regional states, including Saudi Arabia, to be supportive of that plan.”

Bush is committed to the success of Israel’s Gaza withdrawal as a means of winning European and Arab support for U.S. efforts to democratize the Middle East and stabilize the U.S.-led occupation of Iraq.

The president engineered the appointment of the outgoing World Bank president, James Wolfensohn, to advise both sides on the withdrawal. Even in the aftermath of the Palestinian intifada, much of the Gaza economy still relies on Israel, and Bush sees Palestinian self-sufficiency as key to peace prospects.

He has accelerated U.S. engagement in the region: In the past week, four top U.S. officials — Wolfensohn; Elliott Abrams, the deputy national security adviser; David Welch, the assistant secretary of state; and Gen. William Ward, who is coordinating military aspects of the withdrawal — met in the region with top Israeli and Palestinian officials.

The Rand Corporation, a think tank with close Pentagon ties, published a report Wednesday on how to make a Palestinian state viable.

The report estimates that $8.5 billion in investment in near-term transportation infrastructure and $33 billion in other investment will be needed over the next 10 years. They say they expect the money to come from the international community, and note that on a per capita basis, it’s commensurate with the cash the international community pays to sustain the peace in Bosnia — over $700 per person per year.

The Rand team presented its findings to the White House and State Department.

“I would characterize their response as extremely interested,” said Steven Simon, a senior Rand analyst and one of the authors of the report. Bush administration spokesmen could not be reached for comment.

Notably, the report, “Building a Palestinian State,” grades the probability for the Palestinian state’s success as a function of its level of territorial contiguity. That has been a touchy point in a recent standoff between the United States and Israel over Israeli settlement building in the West Bank.

“A new Palestinian state is more likely to succeed if it has a high level of territorial contiguity,” the report finds. An appendix, called “The Arc,” maps out a possible Palestinian state, but envisions Palestinian sovereignty over some of the West Bank settlement blocs that Israel insists it will keep in any peace deal.

Doug Suisman, lead author of “The Arc,” said the plan was guided by Palestinian population centers and ignored settler populations.

Simon characterized Israel’s reaction to the report as “cautious.”

Israeli Embassy spokesman David Siegel said the key to Palestinian success was ensuring Israel’s security, which would guarantee open borders and commerce, a point also highlighted in the Rand report.

“The main issue is the free flow of people and goods, and Israel is committed to assisting the Palestinians in developing a prosperous economy which is contingent on good governance and the rule of law,” Siegel said.

Prodded by the American Israel Public Affairs Committee, Congress is concerned that Abbas has yet to consolidate his control.

Congress worries that U.S. funds could disappear, as international funds regularly did under the rule of Abbas’ predecessor, Yasser Arafat, into a hole of corruption. It wants the money run through nongovernmental organizations rather than the Palestinian Authority.

Administration officials are convinced that Abbas’ finance minister, Salam Fayyad, is committed to accountability; he has welcomed the earmarking of $5 million of the $200 million for an outside audit.

They also note that violence has dropped substantially since Abbas’ election in January. Israel concedes that Abbas has made strides, but wants to see him fulfill commitments to dismantle and disarm terrorist groups.

Abbas said Monday that he expects Hamas to disarm after legislative elections in July, but the group has scoffed at the idea.

The legislative elections are one reason Bush wants Abbas to walk away with a political prize after their late May meeting. Hamas is running in the elections, and it could harm prospects for peace if the group wins a majority of parliamentary seats.

State Department officials have said that if Congress does not give Bush a free hand, they’ll dip into what they say is about $400 million in available funds earmarked for the Palestinians, dating back to the Clinton administration.

Palestinian officials say they hear a new tone from the White House. Three Palestinian negotiators here this week for twice-yearly briefings with National Security Council and State Department officials were surprised to get an invitation to meet with staff in Vice President Dick Cheney’s office.

Cheney, perhaps the most pro-Israel member of Bush’s Cabinet, previously had shunned them.

“In the past, this was difficult to achieve,” said Maen Erekat, who directs the Palestine Liberation Organization’s negotiations department.

The negotiators said they will press for direct U.S. aid instead of having all the money routed through NGOs, said Zeinah Salahi, a lawyer designated to the Gaza withdrawal team.

“A lot of the importance of making the withdrawal a success is the ability to provide emergency assistance,” she told JTA. “That would be greatly facilitated if the money went directly to the government, instead of through another layer.”

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