Israel to Invest Some $11 Million to Create Jobs in the Territories

The government will invest roughly $11 million to create 20,000 jobs in the administered territories in an effort to curb massive unemployment there.

The decision, taken at the weekly Cabinet meeting Sunday, followed hours of debate over what to do in response to reports that the economic situation in the West Bank and Gaza Strip has continued to worsen since the closure of the territories two months ago.

Security experts have also warned that the economic situation will inevitably lead to further frustration among Palestinians and, in the end, increased attacks against soldiers and Jewish settlers.

The Cabinet rejected a more ambitious $37 million job-creation program proposed by ministers of the left-wing Meretz bloc, who fear the closure jeopardizes the peace process.

Also rejected were Meretz proposals to pay unemployment benefits to Palestinians shut out from their jobs in Israel and to allow Palestinians from the territories to sell produce in Israel.

The government did, however, move to make it easier for Palestinians to enter Israel for purposes of medical treatment, business, education and access to places of worship.

Meretz ministers had been expected to condition their cooperation in settling the current coalition crisis on the Cabinet’s accepting a series of demands to improve conditions in the territories.

The two junior partners in the coalition, Meretz and the fervently Orthodox Shas party, have been feuding over the status of Meretz leader Shulamit Aloni, who until two weeks ago was education minister.

But the measures taken appear to have mollified the Meretz bloc for the time being.

“Our requests were accepted only partially by the prime minister,” said Yair Tsaban, minister of immigration and absorption and a Meretz member.

But he said he believed the government would eventually approve the party’s other proposals.

Labor and Welfare Minister Ora Namir, from the Labor Party, said, “I’m very glad that we decided on providing immediate jobs for 20,000 Palestinians. We are obliged to take care of them as long as we are responsible for the territories.

“But I do hope the governmental coalition crisis will be finished immediately because the peace process might be very damaged because of this crisis,” Namir added.

“If there will be no immediate peace process there will be a very serious problem with the Palestinians, with the Israelis and with the security of the State of Israel,” she said.

Also circulated at the Cabinet meeting was a document issued by the finance minister warning that inflation will rise and the gross domestic product will fall if the closure in the territories continues.

Prime Minister Yitzhak Rabin seemed determined to have the government take the initiative on even a modest job-creation program rather than be pressured to institute similar measures by the high-level U.S. State Department delegation reportedly planning a visit here soon.

According to Israeli press reports, State Department officials Dan Kurtzer and Aaron Miller are expected to visit here and try to bridge the gaps between Israel and the Palestinians. They will reportedly seek to reach an agreement on a joint declaration of principles for the peace negotiations.

Commenting on the peace talks, Rabin said at the Cabinet meeting that if an agreement in principle is reached on an interim settlement through the negotiations in Washington, he saw no reason why it could not be applied first in the Gaza Strip. He did not elaborate.