World Bank urges Israel to end Palestinian closures

The Washington-based lender said significant efforts by both the Palestinian Authority and Israel would be needed to justify a major increase in foreign aid to the area.

"Easing internal closures throughout the West Bank must be accompanied by a credible Palestinian security effort," the World Bank said in the report, entitled "Stagnation or Revival? Israeli Disengagement and Palestinian Economic Prospects."

Nigel Roberts, the World Bank's country director for the West Bank and Gaza, said reviving the Palestinian economy was critical to making peace in the region possible.

"Too often in the course of this conflict, economic considerations have been dealt with as a residual element in diplomacy," Roberts said.

"Given the depth of the economic crisis in the West Bank and Gaza, securing work and a future for one's family features very high on the agenda of the ordinary Palestinian and need to be catered to as top priority."

Existing trade, tariff and customs procedures should remain in place until they can be properly re-negotiated by both sides, the bank said. It also recommended accommodation of Palestinian workers in Israel.

"Israel's willingness to maintain, as a minimum, current Palestinian labor levels in Israel beyond this decade would make an important and positive contribution to economic and social stability," the bank said.

The international development institution delivered the report days before the annual meeting of major donors to the Palestinians. International aid - mostly from the United States and European nations - covers more than 50 percent of the Palestinian Authority's $1.4 billion annual budget.

The Dec. 8 donors' meeting, taking place in the Norwegian capital of Oslo, will focus on Israel's planned withdrawal from the Gaza Strip next year, according to diplomats participating in the talks.

The bank said donors should assess progress over the next few months in order to decide whether a major additional aid effort is warranted.

"If and when significant progress is made ... it would make sense to convene a donor pledging conference," the report said.

"Calling such a conference in the absence of adequate progress would be counterproductive," it sad.

Turning to the Palestinians, the report urged the Palestinian Authority to overhaul its courts and address recurrent concerns about corruption in the public sector. It said revamped governance standards were critical "in order to create a legal and regulatory framework that can attract investors back to the Palestinian economy."

The transfer, management and disposal of Israeli settlement assets must be determined ahead of time and in consultation with the public in Gaza and the northern West Bank, it said.

The past four years of fighting between Israel and the Palestinians have devastated the Palestinian economy. The World Bank said last week that 1.7 million Palestinians - nearly half the population of the West Bank and Gaza - live in poverty, getting by on less than $2.10 a day.

International aid has been vital in sustaining the Palestinian economy. - Agencies

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