Quarterly Updates for (16 Nov 1994 — 15 Feb 1995)


Chmn. Arafat met with either PM Rabin or FM Peres or both eight times during the quarter (Peres in Spain on 11/ 24; Peres in Brussels on 11/28; Peres at Erez checkpoint on 12/8; Rabin and Peres in Stockholm 12/9-12; Peres at Erez checkpoint on 12/21; Rabin at Erez checkpoint on 1/9; Rabin at Erez checkpoint on 1/19; Rabin at Erez checkpoint on 2/9). In addition, Arafat and Rabin attended the larger meeting in Cairo on 2/2 that included King Hussein and Pres. Mubarak.

In their meeting of 12/21, Peres and Arafat agreed to proceed with the talks at two levels: between Arafat and Rabin on such issues as troop withdrawal, transfer of power, and security, and at a lower level for implementation of the second stage of the DOP, elections, Palestinian detainees, borders, and the economy.

Throughout the quarter, the Supreme Liaison Committee (under Nabil Shaath for the Palestinians) met off and on in Cairo, while meetings of joint committees for commodities, elections, security, and other issues were held in Cairo, Erez crossing, and elsewhere.

Progress was impeded by security problems (most notably the suicide bombing that killed 21 Israelis on 1/22, and Israeli demands that the PA crack down on its opponents), the closure of Gaza imposed as of 1/22 and the economic hardships that ensued, and increased expropriations and settlement activity as of December. 

Transfer of Authority

On 12/1, Israel turned over to the PA responsibility for health and taxation (direct taxes and VAT). These were the last of the five spheres to be handed over, completing the first phase of expanded self-rule beyond Gaza-Jericho. (Israel had transferred authority for education on 8/28 and for social welfare and tourism on 11/15). Starting 12/1, the PA was to have full financial responsibility in the health domain for hospitalization in Israel, heath services, development, and salaries. Because of the complexity and size of the health system, Israeli Civil Administration health officials agreed to continue as advisors to the Palestinians for an additional three months following transfer. Likewise with regard to taxation, where the Palestinians are not completely familiar with the system, Israeli tax personnel will continue to "tutor" the Palestinians for an additional six months

On 12/7, in the first round of talks on the interim arrangements following transfer, the two sides agreed that Israel would hand the PA control of "packages" of offices in the West Bank as funds become available to the PA, even before the interim stage is completed. The first package should comprise 33 Civil Administration offices.

Given the state of Palestinian finances and in order to facilitate Palestinian selfrule and transfer of authority, FM Peres urged donor countries on 11/28, the eve of the donors' meeting in Brussels, to transfer aid. Israel announced on 11/23 that it would turn over $8.3 m. of Palestinian tax money to the PA by way of example.

Withdrawal and Elections

On 12/15, Israel gave its first response to the PA's election proposal submitted on 10/25, granting some concessions on the size of the council and opposition participation. But while Palestinian-Israeli talks on elections continued on and off, mainly in Cairo, throughout the quarter, wide differences on IDF redeployment prevented progress. Toward the end of November, Israel suggested substituting a permanent IDF pullback from populated areas on the eve of elections, as called for under the DOP, with a temporary three-day redeployment for the duration of the elections only. In the Arafat-Peres-Rabin meetings in Stockholm on 12/9, the Israeli side said any withdrawal prior to elections would have to be negotiated. On 12/12, Rabin offered Arafat the choice between early elections without redeployment and protracted negotiations that could delay elections for a year. On 2/11, Israel said it wanted to keep troops in West Bank towns during elections for security reasons, even if it contravened the DOP.

By the end of the quarter, following the surge in Israeli land confiscations and approvals for settlement construction in December and January, the focus of negotiations had shifted from elections and withdrawal to settlements and Jerusalem.

Progress Achieved

Despite the stalemate on substantive matters, there was agreement on such issues as license plates for Palestinian vehicles, passports for Palestinians, postage stamps (contingent on admission of the Palestinian postal service to the international postal union), and requirements for permission to use safe-passage routes. Progress was also noted on customs and transportation of goods. It was agreed that Palestinians who visit Gaza from abroad could remain for seven months instead of three as before. Israel also agreed to the construction of a Gaza port if donor countries will provide financing. In the Washington meeting of Israel, the PA, Egypt, and Jordan under U.S. auspices on 2/12, Israel and the PA agreed to set up industrial zones in the West Bank and Gaza to provide more jobs for Palestinians.