VZCZCXRO1838
OO RUEHROV
DE RUEHJM #1346/01 1791411
ZNY CCCCC ZZH
O 281411Z JUN 07 ZDK CTG RUEHKU 4124 2161211
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8207
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 JERUSALEM 001346 
 
SIPDIS 
 
SIPDIS 
 
NEA FOR FRONT OFFICE; NEA/IPA FOR 
WILLIAMS/SHAMPAINE/BELGRADE; NSC FOR ABRAMS/WATERS; 
TREASURY FOR SZUBIN/LOEFFLER/NUGENT/HIRSON 
 
E.O. 12958: DECL: 06/28/2017 
TAGS: ECON EFIN PREL PGOV KFTN KWBG IS
SUBJECT: AGREEMENT REACHED TO RESUME TRANSFER OF REVENUES 
BY ISRAEL TO THE PA 
 
REF: JERUSALEM 1321 
 
Classified By: Consul General Jake Walles, Reasons 1.4 (b) and (d). 
 
¶1.  (C) Summary:  The GOI agreed June 27 to resume the 
transfer of frozen clearance revenues, starting with a 
transfer of NIS 500 million on/about July 1, according to PA 
Prime Minister and Finance Minister Salam Fayyad.  Regular 
monthly clearance revenue transfers will resume as well, 
along with installment payments of the remaining frozen 
funds.  Technical meetings between both sides next week will 
focus on transfer mechanisms and amounts owed after 
deductions.  The Israelis also agreed to resume shipments of 
cash into Gaza so that banks there can disburse salaries, 
according to Fayyad and a senior PA Ministry of Finance 
official.  End summary. 
 
Revenue Transfers Resume 
------------------------ 
 
¶2.  (C) Prime Minister Salam Fayyad told the Consul General 
late June 27 that, in a meeting earlier that evening, Israeli 
officials from the Prime Minister's Office and the Ministry 
of Finance informed him that a sum of NIS 500 million (USD 
117 million) in frozen clearance revenues will be transferred 
to the PA on/about July 1.  Fayyad said that several hundred 
million shekels owed for the previous month (June) will be 
provided thereafter, as the first of the now-revived regular 
monthly clearance revenue transfers.  The remaining 
outstanding sum of frozen clearance revenues will be 
transferred in four or five installments along with the 
normal monthly transfers.  The exact numbers will be worked 
out in technical level discussions. 
 
¶3.  (C) Fayyad said that the Israelis also agreed to pay 
interest on the frozen funds and accepted his request that 
they consider adjustments in the payment schedule if the 
Palestinians run into financial problems.  He reported that 
the Israelis set no conditions or auditing requirements. 
Fayyad indicated his general satisfaction with the outcome 
and said the PA will now be able to pay it's full monthly 
wage bill for June more or less on time. 
 
¶4.  (C) PA Ministry of Finance Director General of Customs 
Hatem Yousef told Econoff mid-day June 28 that he had just 
provided the Israelis with the PA's single treasury account 
number to facilitate the NIS 500 million transfer.  He said 
this account, number 100084, is located at the Arab Bank's 
Al-Masyoon Branch in Ramallah.  Yousef, who said he 
participated with Fayyad in the June 27 meeting with the 
Israelis, reported that technical meetings involving both 
sides will begin early next week, during which agreement is 
expected on the transfer mechanisms and amounts due. 
Installment transfers, starting with NIS 250 million, should 
begin soon, and the amount of each transfer will increase 
once agreement is reached on how much the PA is due, 
according to Yousef.  He said that the Israelis estimated the 
net amount of frozen clearance revenues at NIS 1.6 billion, 
but he said he believes this figure to be too low, even when 
considering estimated deductions for water, electricity and 
other agreed payments. 
 
Other Frozen Funds 
------------------ 
 
¶5.  (C) Yousef said that Israeli Ministry of Finance 
officials agreed June 27 to investigate PA claims that 
Israeli courts previously authorized the release of NIS 860 
million of an estimated NIS 1.15 billion frozen separately as 
a result of legal challenges to the PA.  Yousef said the PA's 
legal advisor is in possession of legal documents provided by 
the Israeli courts indicating this amount had been unblocked. 
 
 
Cash for Gaza Banks 
------------------- 
 
¶6.  (C) Fayyad also told the Consul General that the Israelis 
agreed to resume shipments of cash into Gaza so the banks 
there can disburse salaries and other payments (reftel). 
Yousef told Econoff June 28 that Gaza banks have outstanding 
orders for cash transfers amounting to NIS 150 million and 
USD 6 million.  Bank of Palestine and Cairo Amman Bank 
officials told Econoff June 28 that the IDF continues to deny 
the Israeli cash transport company the necessary permits to 
 
 
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