VZCZCXYZ0000
OO RUEHWEB

DE RUEHJM #0366/01 0261201
ZNY CCCCC ZZH
O 261201Z JAN 06
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9953
INFO RUEHXK/ARAB ISRAELI COLLECTIVE IMMEDIATE
RHEHNSC/WHITE HOUSE NSC IMMEDIATE

C O N F I D E N T I A L JERUSALEM 000366 
 
SIPDIS 
 
SIPDIS 
 
NEA FOR FRONT OFFICE, NSC FOR ABRAMS/DORAN/MUSTAFA 
 
E.O. 12958: DECL: 01/26/2016 
TAGS: PREL PGOV KWBG PBTS IS KPAL KDEM
SUBJECT: PALESTINIAN LEGISLATIVE ELECTIONS: DAY AFTER 
ELECTION DAY SITREP # 1 AS OF 1:00 PM ON JANUARY 26, 2006 
 
 
Classified By: Consul General Jake Walles.  Reasons: 1.4 (b) and (d). 
 
 
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Summary 
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¶1. (C) Palestinian political figures awoke on January 26 to 
the signs of a political earthquake, with Hamas now generally 
expected to gain a majority in the new Palestinian 
Legislative Council (PLC).  Fatah candidates Sa'eb Erekat and 
Mohammed Dahlan said the results were "a disaster" and spoke 
of Fatah's incapacity to run an effective campaign.  Abu 
Mazen's chief of staff says the President is still coming to 
grips with the results, and is unlikely to make any public 
statements until the CEC issues preliminary final results at 
¶1900.  Meanwhile, the PA appears to be heading for a 
financial crisis.  EU Special Envoy Mark Otte noted that the 
PA now faces several simultaneous crises: political, 
financial, security, and a possible constitutional crisis. 
 
 
--------------------------------------------- ----------- 
Palestinian Political Figures on Probable Hamas Majority 
--------------------------------------------- ----------- 
 
¶2. (C) A series of senior Palestinian political figures 
provided Consul General with views of the Palestinian 
political class as they come to grips with what is likely to 
be a Hamas majority in the PLC: 
 
-- Central Elections Campaign (CEC) Chairman Hanna Nasser 
called early in the morning to discuss preliminary results, 
saying that Hamas would "definitely" get more seats in the 
PLC than Fatah.  He and his staff are in contact with the 
various political factions as counting continues; the CEC 
plans to announce preliminary final results at 1900 local. 
 
-- Successfully re-elected Fatah member Sa'eb Erekat termed 
the projected results "a disaster."  He also thought that 
Hamas would gain more than 70 seats. 
 
-- Presidential Chief of Staff Rafiq Husseini said the 
President's Office had the same information as everyone else: 
Hamas was likely to get a majority.  He cautioned that the 
numbers were not final, and could still change. Husseini said 
that Abu Mazen is "trying to understand" what happened, and 
was now focused on the security implications of the results, 
which could be significant.  Abu Mazen would then turn to the 
political ramifications, and would not likely make any public 
statements until the CEC announcement at 1900. 
 
-- Successful Fatah candidate Mohammed Dahlan confirmed that 
Hamas would gain a majority.  He opined that Hamas should 
form a government and that Fatah should stay out.  Dahlan 
said "we have to reform this piece of s--t called Fatah." He 
was very angry with Abu Mazen for allowing the chaos in Fatah 
to continue in the runup to the campaign and for appointing 
the "incompetent Nabil Sha'ath" as Fatah campaign manager. 
Dahlan thought that "Abu Mazen should dismiss all the 
leadership in Fatah" and start over.  He thought that Hamas 
would not actually be able to govern, but that he would 
rather have "one year of chaos" than "going on like this." 
 
--------------------------------------------- 
PA Could Collapse Financially Within 48 Hours 
--------------------------------------------- 
 
¶3.    (C) Deputy Finance Minister Al-Wazir called EconChief 
at 11:15 am to report that the PA could collapse financially 
within 48 hours.  Palestinian and Jordanian bankers told him 
that they are no longer willing to extend 
credit to the PA, given the election results.  Only cash will 
be accepted.  Al-Wazir said he spoke with Israeli 
Acting Prime Minister Olmert's office about the scheduled 
January 29 transfer of clearance revenue (estimated at NIS 
320 gross, NIS 260 net after electricity, sewage, and medical 
bills are deducted) to encourage that the transfer 
continue as schedule.  However, al-Wazir conceded that it was 
unlikely that the GOI would do so. 
 
¶4.  (C)  Without the clearance revenue and bridge loans from 
the commercial banks, al-Wazir said he would not be able to 
pay January salaries next week, even if the Saudi and Qatari 
governments transfer what they had promised.  He noted that 
there are already rumors circulating that the PA cannot pay 
salaries.  He is very concerned about a PA payment of NIS 50 
M to Israeli fuel provider Dor due today, January 26.   The 
Arab Bank manager told him the check would bounce, so he is 
 
trying to postpone payment until he can gather enough cash to 
put into the PA's Arab Bank account.  Al-Wazir 
estimated that there is only a one-day supply of fuel in the 
West Bank and Gaza.  If hoarding begins, the supply 
could be exhausted within 12 hours. 
 
¶5.    (C) Al-Wazir confirmed that Prime Minister Quraya' had 
resigned and called for Hamas to form the next 
government.  Al-Wazir said that the PA could only stay afloat 
in the short-term if Saudi Arabia and Qatar 
substantially increased their originally-planned transfers to 
the PA.  Al-Wazir said that Hamas has "bitten off more 
than it could chew," since it will not be able to govern the 
PA without external assistance.  He said he hoped Hamas 
would decline to form a cabinet and that a coalition cabinet 
between Fatah and the independents would be formed 
to govern the PA.  However, in order to forestall an 
immediate crisis, al-Wazir said that external assistance 
from the Gulf states was urgently required in order to allow 
a political compromise to be formulated. 
 
¶6.    (C) EU Middle East Envoy Mark Otte, in a meeting with 
Consul General on January 26, corroborated al-Wazir's points, 
and said he suggested that EU member countries would be able 
to continue financial assistance to the PA given the 
projected election results.  He noted that the PA now faced 
several impending, simultaneous crises: 
 
-- A political crisis on dealing with the results and forming 
the next government; 
-- A financial crisis, due to impending drops in financial 
assistance and transfers; 
-- A security crisis as Fatah and al-Aqsa attempted to deal 
with the election results; 
-- A constitutional crisis if Abu Mazen really decided to 
resign. 
 
 
WALLES