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Israelis, Palestinians Stun Pundits with Political and Economic Accords

November 19, 1991
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Israelis and Palestinians have astounded political pundits by reaching agreement on significant political and economic measures to advance Palestinian autonomy without waiting for the start of formal bilateral talks.

Both sides, acting apparently from mutual self-interest, are trying to establish new patterns of cooperation independent of any ultimate political solution in the administered territories.

Equally significant is the fact that the first moves have been in the Gaza Strip, the most troublesome and impoverished of the administered territories, where the intifada began nearly four years ago.

Moreover, they encompass virtually very element of the Palestinian community, from mainstream Palestine Liberation Organization supporters to the violence-prone, rejectionist Islamic fundamentalist Hamas movement.

On the political scene, local leaders and the Israeli Defense Ministry agreed to establish a new municipal council in Gaza, to be headed by a local Palestinian attorney, Fayez Abu-Rahme.

An acknowledged supporter of the mainstream PLO headed by Yasir Arafat, he issued a statement Sunday hailing the new town council as “a breakthrough which would create a different climate.”

In turn, he got the blessings of the Israelis for a successful administration, although there are obviously still hostile elements at large in the territory.

Gaza had been without a town council for years, precisely because of the pro-PLO sentiments of its leaders. The city was governed instead by Israel Defense Force officers assigned to the Civil Administration.

In another important concession, the Defense Ministry, seeking to help the territory’s moribund economy, has given local Palestinian businessmen a green light to engage in joint economic ventures with Saudi Arabian entrepreneurs.

The Ministry approved the transfer of funds from the European Community and Saudi Arabia to projects run by the Gaza municipality.

Another possibility under consideration is the establishment of a new bank in Gaza with Saudi funds.

The new Saudi interest in economic ventures in the Gaza Strip coincided with a meetings on Monday between American Jewish leaders and the Saudi ambassador to the United States, Prince Bandar Ibn Sultan.

Another source of income will be Jordan, which has transferred hundreds of thousands of dollars to Gaza in the past year.

Defense Minister Moshe Arens told an audience at Tel Aviv University this week that there is now a good chance to reach an agreement with the Palestinians because they are no longer demanding an independent state as a precondition, but are willing to negotiate autonomy in stages.

The negotiations will be face-to-face talks between Israeli and joint Jordanian-Palestinian delegations. The two sides had a cordial introductory session in Madrid but since then have been unable to agree on the venue of their future meetings.

No dates have been set.

The Madrid peace conference formula follows the same lines as the 1978 Camp David Accords. It calls for a five-year period of autonomy in the West Bank and Gaza Strip. In the third year, negotiations would begin over the final status of the territories.

Before the Persian Gulf War last winter, the Palestinians refused even to discuss autonomy, calling it a back-door attempt to impose Israeli law on them. Now they are apparently prepared to negotiate it as an interim stage.

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