Mr. Daniel Ayalon Deputy Minister of Foreign Affairs

Thank you.

Good afternoon and welcome to the Foreign Ministry here in Jerusalem.

First, let me say that since the new government of Israel started its tenure three months ago, we have been waiting for the response of the Palestinians to our call to sit with us directly, and without any preconditions. This call has been made publically, and has been forwarded to the Palestinians - And it was made in a very, very concrete way by both Prime Minister Netanyahu and Foreign Minister Avigdor Liberman.

Unfortunately, so far, we have not received any response from the Palestinians, and we would like them to move forward, irrespective of outstanding issues. We would like to sit with them in order to solve many of the issues. And again, irrespective of that, we are moving forward on the other two tracks that Israel believes are major pillars to establish peaceful coexistence and, hopefully, peaceful relations and a treaty with the Palestinians.

Besides the political pillar, which of course is very important to us, there are two others: Capacity building, which is taking place - and of course, we support and applaud the good work of General Dayton, the Europeans, and anyone who can help build the Palestinians' capacity to govern themselves in a responsible way, to do away with terror, and to create another entity. If we do want to create another entity here, an independent, sovereign one, the last thing we need is a terror state or a failed state. So this capacity building is continued with the help and facilitation of the Israeli government.

And then, there is the third pillar, or the third area, which is the economic one.

This government also believes that, with all due respect to conferences, to press events and to high level dialogs, if people on the ground do not feel the change in their lives, whether it is economic, whether it is social, whether it is cultural, and security of course, on the Israeli part, then all these talks are not worth very much. So, in order, also, to have a bottom - up approach and to really change the situation on the ground, Israel has taken major steps to help spur Palestinian West Bank economy. And, despite, I emphasize, despite the risk involved to the Israelis, we are taking this risk in order to really have a major change on the ground.

And, indeed, in the last two years, but basically the last three months, we have removed two thirds of the check points – two thirds of the check points: out of the forty one, only fourteen remain in operation. All of them are now working on a normally open basis; that is they are open twenty four hours in order to allow much more efficiency.

This is not just a quantitative improvement but also a qualitative one by which all check points surrounding major cities in the West Bank are now removed. If to this we add the Prime Minister’s approval from this morning, to extend the international crossings for Palestinian goods to twenty four hours, we begin to see a critical mass which we believe has and will continue to make a marked improvement in the Palestinian economy.

We also have doubled or allowed the doubling of traffic movement in Shaar Ephraim, and over the last year the track load transfers went from one hundred and ten to two twenty. It just doubled on a daily basis. And we have also made a major change in terms of permits to Palestinian businessmen: many thousands of them can come, and numerous overnight permits as well.
I would say that the aggregate impact of all these steps, as we can see right now, already has some effect on the ground - real improvements. The growth that we see in the Palestinian economy in 2008, just over last year, according to the World Bank, is eight per cent and according to the forecast of the World Bank we have eight per cent for the next two years’ growth for the Palestinians. We see decreasing unemployment in the West Bank. We see a seven per cent real increase in tax revenue for the Palestinian Authority in the West Bank. We see a twenty per cent increase in V.A.T. revenue, out of which, and this is very significant, out of which forty five per cent just in the last quarter. So that, in the first quarter of ‘09, this last quarter, the V.A.T. collection of the Palestinian Authority went up by forty five per cent over the first quarter of last year.

We see a tripling of the number of tourists to the West Bank - one point two million this year. Seventy five per cent hotel capacity. We see that West Bank imports doubled in the last year. We see a fourteen per cent increase in private bank deposits, a twenty four per cent increase in Palestinian workers in Israel; now seventy five thousand of them work in Israel. And we see also a construction boom - people tell me that the new mall in Jenin is a very modern, great one, and Ramallah and Hebron are also cities that are enjoyable to visit.

We also take note with satisfaction that both the Quartet as well as the United States welcome these steps and, as I mentioned, the impact of this critical mass being amassed and directed to the West Bank has already made a major change for Palestinian lives in the West Bank, and we believe that this will continue.

We also want to help the Palestinians with long term projects, and today, the special ministerial committee headed by Prime Minister Netanyahu met to discuss specific projects to work on and to really expedite anything we can from our side. As far I can tell, any bureaucratic or other blocks are not coming from us, but from the Palestinian Authority. So we call upon them, irrespective of political differences, to come and meet and sit and work, on the ground as well as on the political level.

Also, I would like to reiterate the call of the United States to the Arab countries, to contribute their share as well. They keep talking about their interest in bringing about a settlement here, peace here - to solve the conflict. They can do a lot by investing in the West Bank in a major, major way.

And there is no longer the pretext of not having a conducive environment for investments. What I have detailed now, and you will hear in a far more detailed way about what we have been doing to allow access in movement notwithstanding the risk, will also allow foreign investments to come in and create as many jobs as possible for the Palestinians.

Most of the money today – most of the cash today, can be found in the Gulf countries, in Saudi Arabia, and in relation and in sharp contrast to the economic situation in Europe, the United States and other places, this money is available and it is just a matter of political will to do it. So far, we have not seen a cent being invested there and we call upon the Arab countries to do it, to put their share. We will continue to help and facilitate; we want to change the situation continuously, from the bottom up as well as from the top down.

Thank you very much.

I will stop here and I will let my colleagues provide further details - unless there are specific questions on policy which you have right now.

Ethan
My question is just off center of the economics, so if you do not want to answer it, just tell me. In August, in theory, Fatah is going to hold a General Congress after twenty years, and one issue is outsiders getting in. I thought of this when you talked about facilitating foreign investment. Do you know whether the Government of Israel has made a decision for letting in outside Fatah guys, who you may not be in love with to start with?

Mr. Daniel Ayalon
We have not gotten any formal request yet but I am sure that, once we get it from the Palestinian Authority, we will consider it in a more serious way. I will just tell you off the bat that it is not Israel’s interest to block it, but on the contrary to facilitate it as much as we can, barring of course any specific security issues. But as a general rule, Israel will help.

Herb
I have a two part question. The first part is: How did the announcements that you made, how this is connected to the talks that Barak is having with Mitchell in London, or they had with Mitchell in London? How is this working towards what they are trying to do?
And the second thing is that you are talking about wanting to see Arab investment. Number one, why do you think that this is not happening? And, number two, what would Israel do in order to encourage, for instance, the Saudis to invest in the West Bank?

Mr. Daniel Ayalon
First of all, regarding your first question, I do not see any relation whatsoever. Actually we have taken stock of, I would say, all the steps that have been taken, especially in the last three months. And since it was a trickle here and there, we thought that it would be very important to put it in an organized fashion, in a concentrated fashion, so that people will realize what is available right now; what Israel has been doing and what is available.
The second reason is to also call upon international investors to put the money in here, as we have been taking all this risk for access in movement and we will continue with that. So this is the first question.
The other one – with the Saudis. I would say besides calling and beseeching and asking, we cannot do much. I think that there is no excuse whatsoever now, after this historic speech of Prime Minister Netanyahu in Bar-Ilan three weeks ago. So we understand the political horizon, we understand the needs of everyone here and indeed I cannot tell you why. I mean, I can maybe make some surmises why the Gulf countries or the Saudis would not invest but I would not want to speculate here, at this time.
Thank you very much.
One more question.

Name inaudible
Is there any understanding, from Israel’s point of view, that Abbas has taken any measures to disarm or to disband the El Aqsa Martyrs Brigade or any other terrorist groups under him. Or, the last three nights on Palestinian television they are celebrating Fatah, past Fatah murders of Israelis, any commitment in Israel over the frequencies of Palestinian television….

Mr. Daniel Ayalon
No, we are still expecting to see a real move over there, and as I mentioned, of course we do appreciate General Dayton’s work to build capacity over there. But of course much more, a lot more, substantially a lot more can be done by the Palestinians to dismantle the infrastructure - that is to collect illegal arms, to disband and outlaw all the terror organizations. Nothing has been done in this area, not to mention of course, the incitement, the curriculum and all that. These things are still standing. These are not just demands and expectations that we have. I mean these are commitments that the Palestinians have taken upon themselves.

Everybody talks now about the Israeli obligations and commitments. Yes, we are not shying away from this but we say – do not make this commitment, or wait for a hundred per cent fulfillment. This is why we say - you have issues, we have issues; Let us sit and talk. And, of course, our first demand is the security demand that the Palestinians have not done so. But unlike, unfortunately, the Palestinians who come and try to discomfit, who try to condemn, who try to really attack Israel in any international forum, we are not doing that - Because we really want to sit seriously with the Palestinians, and to discuss everything, hopefully in good faith, and with a true commitment to peaceful coexistence. I wish that Abu Mazen, the government there, and Fayyad would really take our government’s attitude, our government’s conduct, very seriously - what we have done already and our willingness for the future as well.

Inaudible name
According to the reports of the UN NGO it would seem that one of the biggest hindrances to the economic development and movement is the security barrier.
Is Israel going to make any changes vis-a-vis the security barrier, and l…….

Mr. Daniel Ayalon.
Yes. First of all, I beg to differ. I beg to differ because I have cited to you and you will hear in further detail concrete data which attests to the fact that the security fence has no impact on economic activities and there are many, many ways actually, to kind of circumvent that, and we have it here. Certainly the security fence has not been in the way of the one point two million tourists that visited. And I can tell you that three more can come if we have more facilities, more hotels and more investment over there. So, that does not coincide with the facts.

Thank you.

Irit Ben Abba, Deputy Director General for Economic Affairs, Ministry of Foreign Affairs.

I will repeat some of the information that the Deputy Minister mentioned, but I would just like to start with a brief introduction to the framework of our dialogue with the Palestinians on economic issues. I’ll give you a bit of information about that, because people do not really know that there is a continuous dialogue on economic issues, and on access and movement as well, between us and the Palestinians.
First there is the donors framework, the AHLC, that has been running more or less smoothly since the signing of the Oslo Accords in 1995. We met in Oslo at the beginning of June; this was the twenty-eighth meeting of the donors groups since 1995. The donors’ community includes Israel and the Palestinians, of course; the chairs are the Norwegians, and the major donors to the Palestinians are members of the AHLC.
In the AHLC, we more or less decided that we are talking about a triangle corporation – meaning Israel, the Palestinians and the donors as well.
We from Israel were asked to take major measures to ease access and movement, and this has been on the agenda in the last AHLC meetings.
The Palestinians’ thrust, as the Deputy Minister mentioned, is to build proper institutions for the future Palestinian state. Capacity building is tremendously important, and we are always raising this subject in the AHLC forum; capacity building is essential for the establishment of a proper Palestinian state in the future.

We are very much pushing this forward with the donors and are also doing a lot on our end, especially with the Ministry of Finance and the customs authorities. We are training Palestinian customs officers, under the roof of the world customs organization as well, and Israel is being applauded for what it has done so far with the Palestinian customs authority.

We are working very hard with the Palestinian treasury. Israel officials are training the Palestinian treasury as much as all of the other donors doing this kind of work. So Israel is contributing a lot to building the capacity of the Palestinian institutions.

The donors’ thrust is to give money. We met in Paris in 2007, if you recall, and the donors committed themselves to a certain amount of money for the following three years, which means form 2008 to 2010. The donors’ commitment was fully implemented in 2008 and what we are seeing in 2009 is only a 50% commitment by the donors to the Palestinians. We discussed this in Oslo in early June. The Palestinians raised these problems of not being able to comply with the donor community’s request vis-à-vis capacity building and the direct development of the Palestinian economy, due to the very fact that they are not receiving enough money from the donor community.

We for our part have taken tremendous and important steps to ease movement and access from the West Bank and my colleague from COGAT will discuss this later.

This relaxation of movement and access and the lifting of roadblocks and checkpoints has had a tremendous impact on the Palestinians’ economic performance in the West Bank. And I will repeat what was already mentioned here. I am quoting Palestinian figures by the way—you have the material—and this is the report that the Palestinians presented in Oslo. These are not our figures, but Palestinian figures for GDP growth, of 5-7% in 2008, expected growth of 7-8% in 2009, 7-8% as well in 2010, and 8.6% growth in 2011 in the Palestinian economy. This is mainly due to the ease of access and movement in the West Bank. So this has to be noted and is very much appreciated by the international community. I will repeat what the Quartet mentioned on June 25, 2009. The Quartet welcomes recent steps by Israel, which have expanded and been sustained and have a significant impact on Palestinian freedom of movement.

There was also a similar quotation and statement made at the donors meeting in Oslo. The spokesperson of the White House also said they appreciate these positive steps, which are consistent with the Israeli government’s commitment to help to improve the lives of the average Palestinian.
I will just repeat again what the Palestinians are saying about their own economy. A major increase in VAT collection that indicates an increase in economic activity. A 45% increase in V.A.T. collection just in the first quarter of 2009. Trade with Israel shows a 44% increase in imports in 2008, and a 66% increase in exports to Israel in 2008. A 24% increase of labor in Israel. So these are very important figures to note.

According to our figures, there was a 35% increase in the trade of Israel as said before, and a total of NIS 13 billion of trade between Israel and the Palestinian Authority. Actually, the Palestinian Authority is the number one single trading partner with Israel.
An 82% increase in the number of trucks that cross between Israel and the West Bank in 2008; this is a major increase. It also includes the transfer of trucks through Allenby Bridge to Jordan.

Tourism was mentioned here before – a major increase in the number of tourists to Bethlehem and this is due to the relaxation of movement and the permits that were given to the Palestinian guided tours to operate in Bethlehem. Over one thousand BNC and VIP cardholders are allowed to cross into Israel without needing to obtain a permit and they can cross from any crossing point to Israel, and this is a relaxation of the last three months. Israeli Arabs can enter Palestinian cities, even with their own cars, and they are the ones that create accelerated growth in the economy. They come, they shop, they dine, and they mainly buy. As was mentioned here before, there is a new shopping center in Jenin catering mainly to the Israeli Arabs coming from northern Israel.

All the major cities in the West Bank are opened and there are no roadblocks or checkpoints around them. Israeli Arabs can come into these cities freely, with no need for prior permits.

There are just a few other important details.

The Palestinians have—at least in the information reported to you—started one thousand very small types of projects in the last year, and we are talking about small and medium size enterprises, starting with very small shops, to the very large project that everybody is talking about now in the West Bank: the Rawabi construction site which is a new city that will be constructed somewhere between Nablus and Ramallah. It will create a lot of employment and cater to the Palestinian middle class, as an affordable housing project. Hopefully it will be finished in the next two years and definitely give a major boost to the Palestinian economy.

Just to sum up, as I said before, there is good dialogue with the Palestinians in the local donors group, which is the joint liaison committee, and in the joint economic committee. We sit regularly with the Palestinians and discuss with them economic issues, and the implementation of the Paris protocol of 1995. We have a constant dialogue with the Palestinians on trying to improve their banking sector and we are now discussing how to create a proper mechanism to supervise the cash transfer to Gaza. It is very important to note that we have this continuous dialogue with the Palestinians on various economic issues, and on access and movement, and on how it can improve the economic development.

Lt.-Col Sharon Biton, Head, IDF Civil Administration Operations Branch

With your permission, I would like to go back a year and a half, back to where we started, and I am talking about the Jenin model. If you had gone to Jenin, you would have seen for the first time the implementation of how security and the economy are combined, affect each other, and go together. This is why, when we are talking now about the Palestinian economy, I will be talking also about security. If I’m talking about lifting roadblocks, which we did, 150 or so, we did that because of security reasons. We did that while taking huge security risks, and although they were calculated and taken by Israeli generals, they are a major part and success of this Jenin model, which later brought us to this day, when we can stand here and talk about the big boom or blossoming of the Palestinian economy. The Deputy Minister was talking about roadblocks; and the quality and quantity. Maybe the most important point to emphasize is the fact that nowadays, when a Palestinian wakes up, up north in Jenin, and wants to go south – to Hebron, he needs to go through no more than two Israeli checkpoints. And the right word is checkpoint; there is no roadblock on the way. He could be checked due to security reasons; not all of them are checked. We make our calculations as to whom should be checked or not, but at the end of the day, if you want to go from Jenin to Hebron, for the first time, in the past nine years or so, you have to go through no more than two checkpoints. One of them is Huwwara, and the second one is Wadi Nar.

The infrastructure of the crossing points and the checkpoints, those that are left and those that we might like to see still normally open, have been dramatically upgraded. I am talking about eight of them. We invested around NIS 80 million in upgrading the infrastructure of those checkpoints. By upgrading them, we enabled ourselves to allow free movement by Palestinian VIPs and BMC—businessman card—holders through the Israeli check points. I am talking about the checkpoints or terminals going from the West Bank to Israel. Those terminals were very tight, had lots of traffic; we upgraded them and nowadays, when a trader from Nablus wants to go have an urgent deal in Tel Aviv, he doesn’t have to stand in line. He goes like any Israeli, who goes from the West Bank to Israel and back. We give preferential treatment to around 200 Palestinian officials; it was very important to the Palestinian Authority that those who play a major part in the security and economic operations be granted preferential treatment, and we granted 200 of them, with the right cards.

Nowadays, we have longer operation hours at the Allenby Bridge; the bridge works from eight in the morning, until eight o’clock in the evening, and as all of us heard, Prime Minister Netanyahu decided this morning that the bridge will probably be open twenty-four hours a day. We are still awaiting this decision and will be prepared to implement it as soon as possible

From my point of view, one of the major improvements was tested through the last three or four Palestinian conventions…one in Nablus…one in Bethlehem…; you could see the investors talking about coming from Saudi Arabia and all of the other Arab countries, and for the first time, being able to see the area with their own eyes. They were able to visit the places, to decide whether they want to invest or not. We have even established a committee to encourage those investors, meaning to say that if somebody is very serious and brings real money into the area, we are willing and prepared to go through a process, a three-stage process, at the end of which he will be granted a Palestinian identity card. This will be all ready to go.
Irit was talking about the three major security points that are important for the Palestinian citizens. Since the civil administration is [represented by] the Israeli official who talks to them—and I am talking about any normal citizen and not only high officials, we know that they point out three major things. One of them is being able to go to work, meaning to say having work. The second one is freedom of movement, and the third one is security. Since we understand that security is very important, we have taken major steps to help the Dayton team establish five new battalions that enable security, which once again helps us to take further steps in removing road blocks, enabling freedom of movement. This circle leads from one to another, enabling us to help and support the Palestinian economy.

The Deputy Minister was talking about the international projects. I would like to point out a few of them. The most important and biggest one is the new city of Rawabi; we have established or set a cornerstone for three major projects meant to support the waste and water treatment plants in Judea and Samaria. For the first time, we are seeing a joint Israeli-Palestinian effort supported by the international community to deal with waste plants and water treatment. We are on the verge of having another cellular operator in the Palestinian Authority – Wataniya. A joint German Palestinian project is building the Mukebleh industrial zone.

I think that, in general, those are the main steps taken recently and the outcome of those steps when we summed up the year 2008 was a dramatic increase in tourism, 1.3 million tourists in Bethlehem, which is a 40% increase in business between Israel and the West Bank. We are talking about NIS 14 billion shekels throughout 2008 – an increase of 16% in tax transfers from Israel to the Palestinian Authority, and an increase of 258% in registered importers, meaning Palestinians importing from abroad to the Palestinian Authority area. We have approved 20,000 cases of late visitors, what some call legal aliens; we legalized these aliens in the West Bank. I am talking about people who came in 1994, their passport expired, and they married women and men from the Palestinian Authority. They had children but had no real identity and were not free to move throughout the West Bank. Now they have Palestinian ID Cards and are free to do so. Some of them are major economic providers or people we talk to, some of the people who came to invest and stayed here. Compared to the last years, there was a 32% increase in applications to obtain BMC cards. And the people coming to obtain those cards are checked by us and we have seen a dramatic increase, meaning there are more businessmen and more revenues in the Palestinian Authority.
One of the dramatic changes is the 12-13% rise in the average number of employees in settlements. And I am talking about 6.6 million working days, which is important because you multiply the number of workers by the days you allowed them to work, because just granting a permit to work in Israel is not enough. This is why we talk about working days. For example, in Israel, we had 5.3 million working days during 2008.

And the last sentence will be about the usage of the Palestinian public transportation. We saw a dramatic increase, and we are talking about Palestinian data given to us by their Ministry of Transportation. This proves that there is an increase in the usage of public transportation. The opening of the checkpoints, which you can see on the map to my right is being used by Palestinians to travel.

My name is Ofir Gendelman and I am the Chief Executive Officer of the Israeli-Palestinian Chamber of Commerce and Industry.
First of all, let me talk a bit about the Chamber – the Israeli-Palestinian Chamber of Commerce and note the name – not Israel-Palestine, since Palestine is not a country and we have been very clever in avoiding this political landmine.

The Israeli-Palestinian Chamber of Commerce was established a few months ago, as an initiative made by top Israeli business leaders, who thought that after 16 years of negotiating with the Palestinians, it is high time to establish, a binational chamber of commerce, like any other of the 45 chambers of commerce that are operating in Israel – the Israeli-British Chamber of Commerce, Israeli-American, and so forth.
Now, we are unique, in many, many ways, and one of them is the fact that we have no counterpart on the Palestinian side yet. This is not entirely a novelty because half of the binational chairs of Israel do not have a counterpart on the other side, but we are the only one who deals with an entity that is not a country…and, with obvious political difficulties.

Now the main idea of the Chamber of Commerce is to facilitate trade between Israel and the West Bank – we do not deal with the Gaza Strip since we accept the policy of the Israeli government, and you all know what happened in the Gaza Strip over the last two years. We accept the political reality as it is and we hope for a better day to come.
Now the idea is not only to facilitate trade but also to establish political and economic trust between the two sides. Mind you, there are NIS 13 billion of trade between Israel and the West Bank; this was in 2008 alone. And the scope, the extent, of the trade is rising.

It is about – let us say, 20 to 80; 80% of those 13 billion is exported from the West Bank and only 20% is sold there.

The idea is basically to create a vehicle of working together to find business opportunities – we are not in the business of pro bono, nonprofit; we are all for profit. That is the key engine of the economic cooperation. No one, whether donor country or private investor, would invest a dime in the Palestinian Authority on a sustainable basis without seeing a profit. And maybe this is the main obstacle that we face today when it comes to investments in the Palestinian economy.

Now, we have heard all of those wonderful steps in order to facilitate trade and to facilitate movement inside the West Bank, but there are still problems that need to be tackled. We heard about Rawabi, the new Palestinian city, the first designed Palestinian city in the West Bank, but although everyone involved blessed the idea, and accepted it with a favorable eye, nothing happened until there was a Palestinian investor. Nothing happened before someone actually said: I am going to make some money here, and a lot of money. And this is the engine that we are looking for. There are a few foreign projects in the West Bank, all sponsored by foreign governments, there are the Japanese in Jericho, the French in Bethlehem, the Turks in Tarqumia which is south of Hebron and so on. All those projects are stuck and the news flash is that I am not blaming Israel for this. The problem is that up until now, although millions and millions of dollars have been spent on this, there has not been a single Palestinian investor who was interested, and I am not saying even willing, interested in investing in Jericho, or Bethlehem and Tarqumia.

So that is the problem. The main goal, the main challenge, is to find a Palestinian investor or Palestinian champion that would hoist the flag of economic cooperation, not for Israel but for them. This is good for the Palestinian economy. This happens all over the world and it should also happen in the West Bank.

Another thing that I think should be tackled is the fact that, in our region, it is sometimes difficult to detach politics from economics. Those two issues have to be separated. We are working not promote the Israeli economy; we are working to promote the Palestinian economy, and I am calling upon the Palestinian side through our media friends here, to establish an Israeli-Palestinian chamber of commerce, to regard economic cooperation as beneficial to the Palestinian authority. First and foremost…because they gain from it.

Another problem that faces the Palestinian economy is that there is no standards institute. Therefore, they cannot export some goods to Israel, the EU and the US. And that means that most of the world markets are closed, not because they do not have the expertise, but because they do not comply with international standards. That needs to be tackled and resolved. Basically, what needs to be done is to get the Palestinian economy in par with the rest of the world, economically. They have their expertise, they have the knowhow, and the only thing I think is lacking is—I would say—entrepreneurial spirit and some guts.

And hopefully, we will be able to see that. We are working with some donor countries to promote their projects in the West Bank. We are working with Israeli companies who are looking for Palestinian partners and business opportunities in the West Bank and up until now there has been a lot of excitement on everyone’s part, about the chamber and its activities. This is the only official or regulated or, let us say, organized body that promotes trade between Israel and the Palestinians, and I really look forward to a brighter future of cooperation between us and the Palestinians.

Question
Can you tell us about the projects that Ofir mentioned - the Germans who are trying to invest in Jenin, the Turks in Tulkarem, and the French in Bethlehem, and the prime minister’s statement this morning that he is trying to revive the projects. How are you going to do so, if you can tell us more, what is happening with the projects?

IRIT
What was discussed this morning was how to practically facilitate the implementation and development of these projects. And we went into details and looked at the problems that prevent them from being pushed forward. One thing that we have to remember is that some of the issues lie in the Palestinian port and not in the Israeli port. For example, the Jalame Industrial Park has been stuck for ten years, not because of any problems on the Israeli side; we have given permits to the Palestinians and confirmations that we will facilitate all the infrastructure that is needed for the Industrial park, meaning water supply, electricity supply, sewage supply. We committed ourselves to doing this many years ago. But we were never approached by the investors with an economical portfolio, economic plans saying we need this amount of water, we need this amount of electricity, and this amount of sewage recycling. And the reason is because there is now a private investor, Mr. Fafuri, who is a Palestinian from Jordan, who is trying to purchase the land from private Palestinian owners and he is not able to do that. So there is no industrial park in Jalame so far because of a problem on the Palestinian side. We committed ourselves to it and repeated today that we will do whatever is needed in order to supply water, electricity, and the recycling of sewage. So that’s about Jalame.

Now the Germans, by the way, committed ten years ago to donate or give a soft loan of 10 million Euros to the Palestinian Authority for the infrastructure projects or whatever is needed for the infrastructure of the industrial park. So far, there has been no money and it has been requested, because the industrial park is not being developed at all. So, that’s about Jenin.

Bethlehem is moving ahead very quickly. President Sarkozy came last March and laid the cornerstone for the industrial park in the southern part of Bethlehem. The French bought the land from the Palestinian Authority and it is all in area A. What Israel has been asked to do is to allow for the free movement of trucks from the industrial site to Tarqumia, or to the Allenby Bridge, and we have committed ourselves to do that. So, from that end, we have done whatever we have been asked to do.

We understand that this is going to be a light industry sort of an industrial park – a sort of souvenir shops will be there and a training center for nurses, as far as we understand from the French. But whatever is needed for the free movement of trucks from the site to the crossings either to Tarqumia or Allenby, we have committed ourselves to that.

Tarqumia Industrial Park was an old project that the Turks wanted to pursue. We understand that the Palestinians are not interested in that industrial park and this is why you do not see an industrial park in Tarqumia so far.

What was discussed this morning was if the Palestinians are interested in industrial parks. We are not so sure what the Palestinians’ policy is at this particular stage, because these are very long-term projects; we are talking about maybe five-ten years. What the Palestinians are interested in at this particular time is small and medium enterprises that will create employment and bring immediate income to the Palestinian Authority. Industrial parks are long-term projects, but if the Palestinians come to us again and say we want to pursue the Jalame Industrial Park, the Tarqumia Industrial Park, any other industrial park, we will facilitate whatever is needed from our side – usually what we are asked to do is to supply water and electricity and to allow access for trucks, people and raw materials to and from the industrial park. The prime minister said that whenever we are asked to do that, we will commit ourselves to allowing the free movement of trucks; and whenever we are asked to supply water and electricity, we will sit down with the Palestinians and see how we can solve these problems.

But we are not sure that this is on the Palestinian agenda at this particular moment.

QUESTION
I have two questions, one of them is the overall issue, the way it was described here is that Israel is making rapid strides towards easing restrictions. And it seems that there is some sort of parallel universe, because if you listen to the donors, they present an entirely different picture.
And there is a statement from the Oslo donors meeting with the Norwegian Foreign Minister, who was talking again about the devastating impact of the restrictions on the Palestinians in the economy. And he says little has been done, little has changed, and the Palestinian Authority is once again hanging on by a thread. Salaam Fayyad is once again shopping around trying to meet his budget needs just to pay the salaries. Donor report after donor report, including from the World Bank, says the key issue here is the continued restrictions. So you give us a certain picture, but maybe you could just address the donors’ criticism one more time.
And then on the specifics about the industrial parks: it seems a key issue is the difficulties Palestinians have in getting their goods abroad through the Allenby Bridge crossing, or the crossings through the separation barrier, and the back- to-back system. For example, the Japanese involved in the agro-industrial park in Jericho are saying that it is just not feasible if I have perishable goods sitting in the sun, trying to get across the Allenby Bridge, trying to get a shipment to the Gulf and it cannot move quickly. So is there any willingness on the Israeli side to consider door-to-door or use huge scanners to speed up the process?

IRIT
I will start with your last comment on the back- to-back or door-to-door. This is a major issue that was raised in the last donors’ meeting in Oslo.
There is a security issue at stake of course, and this is one of the reasons that we are still in the back- to-back system rather than door-to-door. We would very much like to be in a door-to-door system but the security situation at this particular moment does not allow this.

Nevertheless, we have committed ourselves—the Border Management Authority of the Ministry of Defense has committed that each and every single truck that crosses from the West Bank to Israel or trades through Allenby Bridge, although Allenby Bridge is not controlled by the Border Management Authority, will be in the crossing no more than 45 minutes. We have committed ourselves, and we are trying to be there, and that means not to exceed the 45 minutes of a truck having to be in the crossing at any particular time.
After Oslo, we took upon ourselves to conduct a major survey, which is done by a private Israeli firm that now looks at all of the crossings between Israel and the West Bank—there are six commercial crossings—to see how we can facilitate the movement of trucks within the crossings. So we can even reduce the 45 minutes that we committed ourselves to. But with the security situation at this particular moment, I cannot see a change from the back-to-back system to a door-to-door system. Nevertheless, there is a list of very well-known traders that trade with Israel and the outside world, and USAID has requested that these particular traders somehow be allowed to have a door-to-door system in which their goods will be very quickly scanned and transferred goods from one side to the other. These well-known, recognized traders have been trading with Israel for so many years that we are even trying to ease the restrictions of back-to-back with them.

So there is a constant dialogue with the donors; and with USAID because they especially have conducted a lot of work with us on the commercial crossings and also supplied the scanners, as you well know, to most of the crossings. So there is a constant dialogue with the donors on the issue of the crossings, and we are going to discuss this at the JLC forum next week and at the forum in September as well. We are very aware of the fact that this has been one of the major criticisms that has been coming from the donor community.

If you look at the final statement of the Norwegian Foreign Minister in Oslo, he definitely said—and I do not have the text in front of me—but he definitely said that the donor community appreciates and recognizes the positive steps that Israel has taken to ease movement and access in the West Bank. More needs to be done, that is true, and we also recognize the very fact that more needs to be done, but the donor community in Oslo and the Quartet, as I quoted before, mentioned that there were major relaxations of obstacles to movement and access, and you can see this also in the economic figures issued by the Palestinians. And they have also said it in their own statements in the last few weeks, the Palestinians themselves, that they appreciate very much Israel’s recent policies to ease movement and access. This has been stated by the Palestinians in the Palestinian media. They are saying this; it is not us.

We definitely understand and appreciate the fact that more needs to be done, but the international community has also recognized what has been done and that it has a major impact on the territories.

Thank you.

QUESTION
I have somewhat related questions, with regard to Rawabi, there has been this issue of the road that Israel has not permitted to be built.
With regard to Wataniya, there has been for a long time a question of the frequency with regard to two large industries outside of Nablus, Coca Cola and NAPCO – there has been a question of chemicals not being permitted to be brought in. All of these have to do with security questions, and all of them have to do with major projects. I am certainly aware, as you said, that not all of these problems are from the Israeli side, but it seems so central to getting the ball rolling, and I am wondering if you have gotten any progress report on any of those three.

IRIT
Maybe Sharon Biton can say something about the road to Rawabi, but in my understanding this has already been approved.

QUESTIONER
When?

BITON
It was approved in the last two weeks.

QUESTIONER
In the last two weeks.

OFIR
This is what I heard from the investor in Rawabi, that the whole issue has been solved.

QUESTIONER
That it is done.

OFIR
Yes. It is going to be done. The Civil Administration, as far as he said…that they are going to get permission to build the road so that they do not have to drive 45 minutes to get there.

QUESTIONER
You said that they are going to get permission or they got permission?

OFIR
As far as I have been told, they got permission.

IRIT
Wataniya - there was also a letter sent by the Civil Administration or the head of COGAT to Prime Minister Fayyad that this is going to be solved in the very next weeks – the allocation of frequencies to Wataniya. This was your second question.

QUESTIONER
Can you explain to me, if it can be solved in the next two weeks, why it was not solved during the last year and a half? What has changed?

IRIT
There was an agreement between Jawwal, which is actually the only cellular operator now in the West Bank, that Jawwal was supposed to allocate frequencies to Wataniya. This was an agreement between us and Jawwal, and Jawal has not done it.

QUESTIONER
So, this has nothing to do with Israel, is that what you are telling me? Because when I asked Amos Gilad this question last week, he said that this is all a security issue; this is all our problem. The stories about Jawwal are false.

IRIT
It is a security problem, definitely. Because there are very few frequencies in this region, and we have to distribute the frequencies between Israel, the Palestinians and Jordan as well, and there is a major IDF operation in the region, as you know.

QUESTIONER
Is it Jawwal or the idea? Now I am confused.

IRIT
There was an agreement between Israel and Jawwal a year ago, that the allocation of frequencies will be given to Jawwal and Jawwal will have to allocate those frequencies to Wataniya. Jawwal has not done that. We understand that this has been a major issue first and foremost in the international community, but we definitely understand that this is part of the policies that we want to adopt of accelerating the development of the economy in the Palestinian territories. Competition between the cellular companies is important, and this is also major income to the Palestinian Authority.

QUESTIONER
So what has changed and what are you going to do differently?

IRIT
We are going to allocate the frequencies to Wataniya, now, without going via Jawwal and this will be done in the next few weeks.
Now the Coca Cola issue: first and foremost, there are regulations about dual-use materials that are not allowed into the territories. So, Coca Cola, if I am correct, has to do with dual-use materials….It is not spare parts, it is chemicals.

QUESTIONER
But the chemistry they said they had diluted it by 70%.

BITON
The spare parts [problem] was solved and they got permission a month ago. The second problem concerns the chemicals – there is a problem and we did check all over the world. None—and I emphasize none—of the Coca Cola company factories all over the world use this high a concentration of chemicals. As to your question, what has changed, what will be changed – we are nowadays negotiating all kinds of security factors and I cannot guarantee it will be possible, but if we consider granting permission for those chemicals, you must take into consideration that any liter of those chemicals means exploding bombs. This is why we take huge risks, as I told you here, we cannot take and open all over. Same with NAPCO. We just yesterday had a meeting with Palestinian officials who were ready to take responsibility for guarding those chemicals – we heard that only yesterday. We must study it and we will give our answer to the Palestinians soon.