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OO RUEHROV
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O 231533Z JAN 09
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3917
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 JERUSALEM 000174 
 
SENSITIVE 
SIPDIS 
 
NEA FOR FRONT OFFICE; NEA/IPA FOR 
GOLDBERGER/HOLMSTROM/LENTZ; NSC FOR SHAPIRO/PASCUAL; 
DEPT PLEASE PASS TO USAID FOR ANE/MEA:MCCLOUD/BORODIN 
 
E.O. 12958: N/A 
TAGS: EAID ECON KWBG IS PGOV
SUBJECT: FAYYAD TO DONORS: AFTER GAZA, PALESTINIAN 
RECONCILIATION IS NEEDED 
 
¶1. (SBU) Summary:  Palestinian Authority (PA) Prime Minister 
Salam Fayyad called for national reconciliation in 
conjunction with a comprehensive plan to rebuild Gaza.  He 
said that the GOI needs to allow in "more than food and 
medicine" and lamented restrictions on cash transfers that 
continue to restrict relief operations.  He outlined a plan 
for international donor conferences to support Gaza recovery 
and the PA's fiscal needs, beginning with a meeting in Cairo 
to solicit humanitarian support for UN agencies.  He said the 
PA's financial situation is so dire that he will have trouble 
making the next salary payments.  Donors uniformly supported 
the PM's message, stressing the importance of open borders 
and available cash in Gaza as central to the relief and 
recovery effort.  End Summary. 
 
Fayyad: Time to "Unify our Country" 
=================================== 
 
¶2. (SBU) PM Fayyad told donors in Ramallah on January 22 that 
the international effort to secure a durable ceasefire is now 
"only focused on issues important to Israel; this is not 
helpful."  He said the return of the PA to Gaza and the 
opening of the crossings are a "key part of any ceasefire 
agreement."  By focusing only on the need to stop rocket 
attacks out of Gaza and the threats to Israel, the 
international community risked "cementing the separation 
between Gaza and the West Bank." 
 
¶3. (SBU) Fayyad acknowledged a number of practical questions 
about Gaza's reconstruction.  The best way to address these 
questions, he said, is through a Palestinian government that 
"reunites our country" and can act in both the West Bank and 
Gaza.  A unified government, he said, would also need to be 
able to deal with the international community on 
reconstruction issues, and is the only way to ensure a 
comprehensive, not piece-meal, approach to Gaza. 
 
¶4. (SBU) Fayyad said the Israeli military operation in Gaza 
had created "an absolutely catastrophic situation on the 
ground."  He noted massive amounts of assistance are needed 
and that UN agencies, such as UNRWA, are best suited to 
implement recovery programs.  Fayyad urged the international 
community to see humanitarian assistance as more than food 
and medicine.  He called for the GOI to allow into Gaza cash 
and material to repair water and electricity networks, 
provide shelter for displaced people, and allow construction 
to begin.  (Fayyad noted that the GOI had allowed only UNRWA 
to transfer banknotes into Gaza over the past month, a 
situation that is imposing additional hardships on people who 
cannot access their bank accounts for needed purchases.) 
 
¶5. (SBU) Existing donor mechanisms, Fayyad said, should be 
used for recovery and reconstruction.  He endorsed a donors 
meeting in Egypt in February.  There would need to be another 
meeting, shortly after Cairo, he said, to fold Gaza's needs 
into overall PA planning.  This second meeting would be 
linked to the AHLC and would additionally focus on securing 
donor support to meet the PA's 2009 external financing needs. 
 (Note:  The Norwegian representative noted later that they 
hope to hold an AHLC as early as February 24.  End Note.) 
 
¶6. (SBU) The PA, Fayyad said, does not currently have enough 
cash to make salary payments next month, "and there isn't 
enough money in the pipeline to do the trick."  He noted the 
PA continues to pay salaries to its Gaza employees, an 
increasingly important source of income in the aftermath of 
the fighting.  The PA is also taking on additional social 
welfare payments in Gaza, but funding for Gaza would be cut 
if the PA cannot close its recurrent deficit, he said. 
(Fayyad noted that he expects the Norwegian FM to circulate a 
letter outlining the PA's budget needs as early as January 
23.) 
 
PA Is Planning 
============== 
 
¶7. (SBU) Minister of Planning Samir Abdullah told the group 
that PA Ministries have begun work on a consolidated "Early 
Recovery and Reconstruction Plan".  Abdullah said the work is 
being conducted in close cooperation with the UN.  The plan 
will consider the prioritization and sequencing of 
humanitarian needs, recovery, and longer-term reconstruction 
and development.  The plan will also address the need to 
channel funds in a transparent manner through the PA's Single 
Treasury Account or existing trust funds.  Abdullah noted 
 
JERUSALEM 00000174  002 OF 002 
 
 
that he hoped to distribute a concept note and additional 
details on the Ministry of Planning's effort in the coming 
week. 
 
Donors Focus on Access and Cash 
=============================== 
 
¶8. (SBU) In response to the PM's comments, Consul General 
Walles urged donors to put the PA in the forefront of 
assistance efforts for Gaza, including by helping the PA meet 
its financing needs.  The Consul General emphasized the 
importance of UN agencies as a vehicle for disbursing 
assistance quickly.  He called on donors to support the UN's 
upcoming emergency appeal, and he urged use of existing donor 
structures, including the AHLC, to coordinate assistance 
between the PA, donors, and the GOI.  He said the competition 
between capitals to host donor meetings is an "unnecessary 
distraction," and that donors should follow PM Fayyad's lead 
on when and where to meet. 
 
¶9. (SBU) Other donors supported Fayyad's call for open 
borders as critical to any relief operation.  Deputy UN 
Special Coordinator Max Gaylard noted that UN U/SYG John 
Holmes was in Gaza on January 22 to launch a quick 
assessment, the results of which would be released as a 
Special Appeal.  Gaylard noted that humanitarian shipments 
into Gaza have increased in recent days, though he called the 
volumes "totally insufficient" to meet Gaza's needs.  "We are 
seeing indications of a return to the pre-fighting processes 
and restrictions at the crossings.  This would be 
unsatisfactory." 
 
¶10. (SBU) The Czech representative (as EU President) called 
for the reactivation of the 2005 Access and Movement 
Agreement.  He said that the international community needs to 
make sure that Hamas does not take control of international 
assistance and that donors maintain support for the West Bank 
while attention is focused Gaza's needs.  "The PA is in a 
tough position," he said.  "They met their obligations to 
ensure that the West Bank remained calm and instability did 
not spread, which made them unpopular with their people." 
 
¶11. (SBU) World Bank head David Craig commended the PA's 
leadership, stressed the importance of getting cash into Gaza 
to disburse salaries and facilitate social welfare payments, 
and said "the most important thing" is the progressive 
opening of the crossings for humanitarian, commercial, and 
project goods.  Norway, France, the IMF, and the Quartet 
Representative's office all echoed the same themes. 
WALLES