Quarterly Updates for (16 May 1995 — 15 Aug 1995)

Palestinian-Israeli Track

Although successive target dates were missed for the conclusion of the long-overdue interim agreement provided for under the Declaration of Principles (DOP), being referred to as "Oslo B" in the press, progress was achieved during the quarter.

On 5/16, Israel and the Palestinian Authority (PA) began parallel negotiations on elections and redeployment (he redeployment talks being broadened later to include expanding self-rule beyond Gaza and Jericho). After the 7/1 target was missed, Chmn. Yasir Arafat and FM Shimon Peres restructured the talks, scrapping the parallel negotiations in favor of one set of expanded talks embracing all areas. By August, over 150 negotiators were working in nearly 20 subcommittees under Israeli and Palestinian negotiating teams led by Israeli FMin. Dep. Dir. Uri Savir and PA Economic M Ahmad Qurai'.

At the suggestion (8/2) of U.S. Amb. to Israel Martin Indyk, U.S. Consul Gen. Edward Abington, and UN coordinator Terje Larsen (who questioned whether an accord could be reached among so many negotiators and committees), Peres and Arafat began intensive one-on-one talks. By 8/10, a partial interim agreement had been hammered out, which was initialled by Savir and Qurai' on 8/11. A joint statement (see Doc. A2) broadly outlining the points covered in the partial agreement was approved by the Israeli cabinet on 8/ 13 (15-1, 2 abstentions), and approved by consensus on 8/15 by the PLO Executive Committee (10 out of 18 members present) and the Fatah Central Committee. That day, the teams resumed talks to resolve remaining differences. A new target date for the conclusion of the final agreement was set for 9/9. 

Although all issues were dealt with together starting in July, progress in the various areas is outlined below:

Expanded Self-rule

From the time the expanded self-rule talks began on 5/16, the number of spheres of authority that Israel agreed to transfer to the PA grew from five (energy, insurance, labor, postal services, trade and industry) to eight (adding on 5/ 22 agriculture, census and statistics, and local administration) and finally (on 6/6) to all 32 remaining spheres (except water and public lands). These were to be transferred at once, rather than in stages. In return, the PA agreed to not hold Israel to the 7/1 deadline. Sides immediately set up technical teams to discuss the transfer of each sphere.

A labor agreement was drafted 6/7; a communications agreement was signed 6/ 21, allowing Palestinian Broadcasting Service to transmit from television stations in Gaza, Hebron, Janin, Jericho, Nablus, and Ramallah, and to set up a radio station in Gaza; and a draft accord covering agriculture, labor, and local administration was finalized 7/12. 

On 8/7, Peres proposed "functional sovereignty" (emphasizing autonomous institutions rather than the actual transfei of land) as the basis for Palestinian selfrule. Arafat rejected the idea.


After various changes in timing and definitions over the negotiating period (redeployment and security being the thorniest component of the talks), Arafat and Peres agreed on 8/8 to a timetable giving the IDF until 2/97 to complete redeployment,he second stage to begin six months after elections (then hoped to be held in 12/95) and control of roads to be given up one year after elections. Earlier, on 7/4, Arafat and Peres had clarified that the first stage of redeployment (from Janin, Nablus, Qalqiliyya, and Tulkarm) would begin four weeks after the signing of the agreement and end 25 days before elections; during the vote, the IDF would temporarily pull out of Bethlehem, Hebron, and Ramallah. Redeployment from Ramallah and Bethlehem was to be completed by 4-5/96 after bypass roads were built, while the future of Hebron was to be discussed by a special committee. The definition of the zones was finalized on 8/9 (see Doc. A2).


On 6/27, the PA and Israel agreed that elections would be held 22-35 days after redeployment from Janin, Nablus, Qalqiliyya and Tulkarm was complete; by that time, the PA was to have control over all civilian spheres (as agreed 6/ 29).

On 5/17, the sides agreed the PA would be in charge of maintaining security during elections but that joint PA-Israeli patrols will be deployed. Israel continued to insist that East Jerusalem Palestinians not be allowed to run in the election but agreed (5/3 1) they could vote, provided their polling stations are outside Jerusalem-a stipulation the PA did not accept.

pt. Also on 5/17, the sides agreed to set up a tripartite (EU-Israel-PA) committee to discuss the role of international monitors during elections. The committee's first meeting was held on 5/24 in Brussels, where the EU promised to provide $19.5 m. for the 700-member monitoring team. Monitors would begin work 100 days before elections to draw up candidate lists and establish an election commission, then monitor polls and produce a final report.

Talks continued on size of elected council (5/31, 6/29), voter lists (5/24, 6/ 19), the Jerusalem issue (6/29), and international supervision (5/24, 6/19).

Meanwhile, in anticipation of elections, new political groupings were announced, including: Ahd Party, Christian Democratic Party, Islamic Jihad al-Aqsa Brigades, Islamic National Path Movement (split from Hamas, funded by the PA), Movement for Democratic Construction (by Haidar 'Abd al-Shafi), National Coalition of the Children of Martyrs, National Movement 'or Change (a merger between Movement for Change and Democratic National Grouping), New Palestinian Brotherhood Council, and Palestine's Islamic Salvation Front.

Prisoner Release

With pressures for the release of Palestinian prisoners building (including a Palestinian prisoners' hunger strike 6/17-7/6), negotiations on the issue were led on the Palestinian side mainly by PA Planning M Nabil Shaath (6/ 11, 6/15, 6/30, 7/11, 7/14, 7/20); Arafat and Peres (6/25, 7/4) also discussed it. Israel agreed to the principle of a release on 7/1, the details of which were announced on 7/22 by Shaath: 2,541 Palestinian prisoners (including 2,200 Hamas and Islamic Jihad members) were to be released in two groups, 1,000 when Oslo B is signed and the rest two months later. Following talks 7/30, the PA proposed (8/ 9) a three-stage release: first, all women, the sick, those jailed for more than ten years; second, those arrested before the signing of the DOP; third, security prisoners.


In the intensifying conflict over sovereignty in East Jerusalem, Israel claimed on 5/19 that the PA was operating 14 illegal offices in the city (though with 'roof for only four). The Knesset passed a law 7/3 giving legal basis for the closure of all 14. The PA admitted to three offices (statistics, housing, and information bureaus) and agreed to close them. It should be noted that Orient House was not included in the banned offices and by the end of the quarter was allowed visitors up to the foreign minister level, though disputes continued, particularly with regard to the construction of an annex. Meanwhile, the East Jerusalem Municipal Council resurrected from 1967 by the PA held its first meeting 6/20. On 8/14, Israeli Police M Moshe Shahal warned the PA that the council was illegal and members could be arrested.

Religious Sites

On 7/16, PM Yitzhak Rabin said partial control forJewish religious sites such as Rachel's tomb (Bethlehem), Joseph's tomb (Nablus), the Altar of Joshua (Mount Ebal), the Herodian mountain, the Qumran caves, and other archaeological sites in West Bank eventually would be turned over to the PA, along with total control over access roads to the sites. On 7/25, Rabin reversed himself in the face of public protest and promised to link Rachel's tomb with Jerusalem municipal boundaries to keep it under full Israeli control. He also promisedJewish access to Machapela Cave in Hebron and Joseph's tomb, and agreed to set up a committee made up of one MK from each religious party to advise Israeli negotiators regarding West Bank holy sites.

Economic Matters

Discussion on industrial zones continued despite Rabin's decision on 5/30, on IDF advice, to drop the "national separation" plan as unfeasible. On 6/8, PECDAR announced an agreement to establish nine industrial zonesthree in Gaza, six in the West Bank-in the next three years. Israel would be responsible for security.

Meetings on cooperation during the quarter included one between PA Social Affairs M Intisar al-Wazir and Israeli Labor and Welfare M Ora Namir on labor, social security, and welfare policies (7/ 24), and another between PA Planning M Shaath and Yossi Beilin (newly appointed as Economics M) on economic planning activity and plans for joining electricity grids (7/28).

On 6/1, the first branch of the Palestinian Investment Bank opened in Jericho, followed by Palestinian Islamic Bank's opening on 8/9, bringing to 28 the number of bank branches operating in self-rule areas.

A commercial crossing point between Egypt and Gaza opened on 5/29. Fifteen truckloads of goods/day are allowed in, but loads must switch haulers at the border. On 6/15, a similar junction between Jordan and the West Bank opened at King Hussein Bridge. Meanwhile, a6/8 meeting in Jeddah between Saudi Arabian officials and a PA agriculture, trade, and finance delegation resulted in a cooperation agreement on Palestinian exports to Saudi Arabia. Also in June, the PA began issuing its own "certificates of origin" for exports. 

Efforts to stimulate private sector investment and promote development in self-rule areas included:

  • The creation, announced in Dubai on 5/24, of the Arab Palestinian Investment Company (APIC), a new private company (capital $100 m.) for investing and creating employment opportunities in the West Bank and Gaza. If APIC, set up by 31 Gulf businessmen and Gulf-based Palestinians led by Riyadh-based Gaza businessman Omar al-Aqqad, proves profitable, it will set up a subsidiary for financing existing Palestinian companies.
  • A meeting on 5/24 in Amman between Arafat and 120 Jordanian businessmen, hosted by King Hussein.
  • A conference involving 400 Jordanian and Palestinian businessmen in Amman 6/4-7, where it was agreed to form a joint council to explore establishing a free-trade zone in the Jordan Valley; initiating joint commercial exhibitions; activating trade between the self-rule areas and Jordan; starting joint investment projects in cement production, petroleum refining, agriculture, and salt extraction from the Dead Sea; unifying standards and measures; and establishing scientific research centers.
  • A meeting on 7/26 in Gaza, between PA officials and representatives of more than a dozen U.S. companies (incl. Bechtel, Intercontinental Hotels, and Chicago Power.
  • On 7/13, PA Planning M Shaath revealed that Gazans had spent $540 m. in 1994-95 building restaurants, gas stations, and housing. Development plans for 1995-96 include 30 miles of highway, a seaport, a Marriott hotel, an airport, and public parks and buildings.

Progress Achieved

PA passports were accepted as valid travel documents by France and Spain (early June), the UK (6/ 13), Turkey (6/17), Qatar (6/19), Greece (6/23), Russia (7/31), Cyprus, Denmark, Israel, Morocco, Saudi Arabia, and the U.S.

On 6/19, Egypt began accepting mail from self-rule areas bearing Palestinian postage stamps for distribution abroad.

On 5/23, the Israelis agreed to designate the heliport in Gaza as an international border crossing and permit its use as the future site for airline transit to Cairo. On 7/27, the first Palestinian plane with a Palestinian crew overflew Gaza. 

th a Palestinian crew overflew Gaza. On 7/29, Qatar announced plans to open representative offices in the self-rule areas.

On 8/15, the first 143 of 2,000 Palestinian police trained in Algeria entered Gaza from Egypt. The IDF forbid entry to 2 others on security grounds.