(Communicated by the Prime Minister’s Office)

Fuad Hejazi Muhammad Shubaki, born in 1942, from the Gaza Strip, was transferred to the Israel Security Agency (ISA) for investigation on 14 March 2006, after being apprehended in a combined IDF-Israel Police-ISA operation at the Jericho prison, where he had been incarcerated since May 2002.

Prior to being incarcerated in Jericho, Shubaki was in charge of finances for the Palestinian Authority (PA) General Security service and had been the late Yasser Arafat's finance person. Shubaki admitted that upon the outbreak of the current round of Palestinian violence and terrorism in the autumn of 2000, Yasser Arafat ordered him to purchase such large quantities of weapons as the various funding sources would allow.  To this end, senior PA security service officials began to purchase war materiel and set up an administrative apparatus, with representatives stationed abroad, to aid them.

Shubaki said that these officials passed proposals for purchasing arms to him; he then submitted them to Arafat for approval.  After receiving Arafat's approval, Shubaki would finance the various purchases.  The PA thus acquired vast quantities of weapons, munitions, explosives, etc.

Shubaki said that among the aforesaid senior security service officials were Jibril Rajoub, Amin al-Hindi, Haj Ismail, Rashid Abu Shabak, Abdul Razek Majaideh and Ghazi Jebali.  In addition to financing the smuggling of war materiel, Shubaki also financed the independent production of war materiel for the PA, including grenades, explosives, RPG's, etc.

According to Shubaki, the financing for these war materiel purchases came from international assistance, tax revenues from the Gaza Strip, customs revenues transferred by Israel and funds from Arab countries. When the latter two were either in short supply or were absent, purchases were correspondingly scaled down. Shubaki estimated that between $7-10 million in PA funds was spent every two years on war materiel for the Gaza Strip and $2 million on war material for Judea and Samaria.

Shubaki said that the Al-Aqsa Martyrs Brigades and the Tanzim used weapons supplied by the PA security services, the smuggling and purchase of which was financed by Shubaki, with Arafat's knowledge.

Shubaki and Yasser Arafat were also directly involved in the Karine A affair. Shubaki said that the Iranian Revolutionary Guards and Hizbullah were among those who financed and guided the smuggling attempt by the Karine A, and Iran, Hizbullah and Ahmed Jibril's organization had contributed the war material on board.

Shubaki said that he met with Iranian officials in Dubai in March 2001 and added that the latter had offered to aid the PA similar to their aid to Hamas and Islamic Jihad. This included assistance in channeling funds to the PA areas, in weapons production, and in military training. Shubaki said that Arafat opposed accepting this Iranian assistance, fearing an Iranian plot to attack him.