O 250525Z FEB 09
FM AMEMBASSY RIYADH
TO SECSTATE WASHDC IMMEDIATE 0266
INFO ARAB ISRAELI COLLECTIVE IMMEDIATE
GULF COOPERATION COUNCIL COLLECTIVE IMMEDIATE

C O N F I D E N T I A L RIYADH 000355 
 
 
E.O. 12958: DECL: 02/24/2019 
TAGS: PREL EAID KWBG GCC SA EG SY
SUBJECT: SAUDIS SEPARATE GAZA RECONSTRUCTION FROM PA SUPPORT 
 
REF: JHARRIS EMAILS 2/23 AND 2/24/09 
 
Classified By: PolCounselor Lisa Carle, 1.4(b), (d) 
 
¶1.  KEY POINTS 
 
--  (U) A February 22 meeting of GCC foreign and finance 
ministers in Riyadh Gaza decided to establish a "common 
program for the reconstruction of Gaza open to all Arab 
countries" in cooperation with the Islamic Development Bank 
in Jeddah. 
 
--  (U) Program funds will be given directly to 
reconstruction projects and not to Palestinian parties or 
factions.  Initial funding would include $1.2 billion pledged 
by Saudi Arabia and Qatar. 
 
--  (C) A Saudi Finance official confirmed February 24 to 
visiting treasury DAS Mendelsohn that the Saudis have decided 
to treat Gaza reconstruction separately from budgetary 
support for the Palestinian Authority (PA). 
 
--  (C) The Saudis told Egyptian FM Aboul-Gheit they remain 
firmly behind Egyptian efforts at Palestinian reconciliation, 
but that a step forward is needed before the Sharm-el-Sheikh 
conference. 
 
--  (U) Saudi media reported that Syrian FM al-Muallim paid a 
three-hour visit to Riyadh Feb.24 bearing a letter from 
President Assad to King Abdullah. 
 
 
¶2.  COMMENT 
 
--  (C) The GCC decision to establish a 'neutral' Gaza 
reconstruction fund and the Muallim visit are evidence the 
Saudis are pressing for a breakthrough on Arab rapprochement 
in advance of the Doha Arab League summit.  But these events 
could indicate the Saudis are also receiving pressure to act 
to avoid another messy airing of Arab differences at Doha. 
Because Doha is a regularly scheduled summit, the Saudis 
likely have less room to maneuver than they did in Kuwait. 
 
--  (C) The GCC agreement does not mean the Saudis are 
unwilling to contribute to the PA, but it appears to mean 
that any funds for the PA will not come from the $1 billion 
Kuwait pledge, and that the Saudis do not want to give the PA 
an exclusive franchise for reconstruction at the expense of 
Arab unity. 
 
BACKGROUND 
 
¶3.  (U) Initial funding for the GCC/IDB reconstruction 
program would consist of the $1 billion pledged by Saudi King 
Abdullah in Kuwait and a $250 million pledge from Qatar. 
Other GCC members also committed to contribute.  GCC 
Secretary General al-Attiyah said "the capital of this fund 
is to be determined during the international donors 
conference" in Sharm-el-Sheikh. 
 
¶4.  (C) Post's working level contact in the MFA Palestinian 
Department confirmed the decision that funds from the GCC/IDB 
facility would not go through the Palestinian Authority; 
rather, he said, reconstruction funding would be given to 
"whoever needs it." 
 
¶5.  (C) Vice Chairman of the Saudi Fund for Development 
al-Bassam made clear to DAS Mendelsohn that the Saudis have 
decided to separate Gaza reconstruction from support for the 
PA, and that funds pledged for reconstruction efforts would 
not go toward the PA budget.  Saudi Deputy Finance Minister 
al-Bazai indicated to Post in an earlier meeting that Saudi 
funds for the PA budget would be provided directly to the PA. 
 Separately, an Egyptian Embassy contact told Post a proposed 
Arab League fund for Gaza has been put on hold until the 
Sharm-el-Sheikh conference. 
 
¶6.  (C) Egyptian FM Aboul-Gheit and Intel Chief Soliman paid 
a brief visit to Riyadh February 17.  An Egyptian Embassy 
contact said the Saudis told Aboul-Gheit they expect a 
breakthrough on Arab rapprochement, as they see Syria slowly 
moving away from Iran.  The Saudis said they see Syria as the 
weak link in the chain, in part because Syria's alliance with 
Iran is only tactical, not strategic, so the Saudis are 
focusing on peeling Syria away from Iran.  The contact added 
that Egypt shares this analysis and also sees Hezbollah 
moving closer to Iran and away from Syria, which could 
improve chances for Syria/Saudi reconciliation. 
 
¶7.  (C) In turn, Aboul-Gheit was confident something would be 
achieved soon on Palestinian reconciliation because the 
Egyptians see Fatah as weakened by the latest violence, with 
reconstruction as its only card to play.  Aboul-Gheit was 
less sanguine about prospects for a Gaza cease-fire following 
the Israeli elections, but told his hosts a cease-fire was 
not prerequisite for the Sharm-el-Sheikh conference. 
 
¶8.  (C) Muallim's visit follows on the recent public visit to 
Damascus by Saudi Intelligence Chief Prince Muqrin.  Saudi 
media also reported that Saudi business tycoon Prince 
Alwaleed bin Talal met Syrian President Assad in Damascus 
February 24.  Prince Alwaleed does not hold a government 
post, but has served as an informal Saudi envoy on issues 
related to Lebanon. 
 
 
FRAKER