- The Washington Times - Monday, July 15, 2002

Secretary of State Colin L. Powell will urge U.S. allies to cut off funding for the Palestinian Authority at a New York meeting tomorrow with his European, U.N. and Russian counterparts.
"We're at the point of generally saying we don't want money to go into the coffers of those are into terrorist activities," said a State Department official, speaking on the condition of anonymity.
"Clearly humanitarian needs must be met, but we need to be certain the money does not go to terrorism. That's the topic of the discussions."
The question of funding for the Palestinians "will come up at the Quartet" meeting in New York of Mr. Powell and his counterparts from Russia, the EU and the United Nations, the official said.
State Department spokesman Richard Boucher said Friday that "these discussions will focus on advancing President Bush's vision for two states living side by side within secure and recognized borders."
"And these discussions will also address the continuing efforts by the United States, the Quartet, and our international partners, to assist the Palestinian people in their effort to implement reform of Palestinian institutions and the economy in preparation for statehood."
The United States has cut off direct funding for the Palestinian Authority, although it continues to be one of the largest donors to humanitarian aid programs that bypass the PA.
The EU, however, gives about $9 million a month directly to the PA money that Israel claims has been used to fund terrorism. Arab states also give money to the PA.
A major goal of the Bush administration foreign policy is to persuade the Europeans and Arabs to follow the U.S. lead and block funds to the PA unless it carries out drastic reforms including changing its leadership.
Israel has shown documents to journalists and U.S. officials that it says prove that Palestinian Authority leader Yasser Arafat and his closest aides made payments to militants known to be planning attacks on Israeli civilians.
Mr. Bush, in a June 24 speech, ruled out any further cooperation with the PA until it got rid of its leadership after he saw evidence of its links to terrorism.
An Israeli official said that the Bush administration is considering a plan to create new bank accounts for Palestinian aid and reconstruction that could not be accessed by PA leader Yasser Arafat or his Cabinet or allies.
The State Department official confirmed that the new bank accounts are under consideration. "That's one idea that's out there it's not ours, not specifically," he said.
Talks on the Palestinian funding will take place not just at tomorrow's Quartet meeting, but later in the day when the foreign ministers of Jordan and Egypt join Mr. Powell, EU senior diplomat Javier Solana, Russian Foreign Minister Igor Ivanov and U.N. Secretary-General Kofi Annan.
The Egyptian and Jordanian ministers will then visit Washington for meetings Thursday, along with the Saudi Arabian foreign minister, with Mr. Bush and Mr. Powell.
About 2 million Palestinians have been living under Israeli military occupation since June 21, following a series of suicide bombings.
The occupation ended the suicide attacks but left the Palestinians suffering severe hardship. Even before the latest clampdown, the uprising that broke out in September 2000 has cost them 120,000 jobs in Israel as well as a market for their crops and access to foreign trade.
Officials from the Quartet, Japan, Norway and the World Bank met in London last Wednesday to set up a number of task forces designed to help Palestinians reform their security, finance and education systems as demanded by Mr. Bush.
Yossi Alpher, a former Israeli Mossad official, said by telephone from Israel last week that an Arafat Cabinet shakeup appears to be more than just window dressing, as some Israeli officials have said.
The newly appointed Palestinian interior, finance and education ministers appear to be "squeaky clean," he said. All three of them said in talks with Israeli Foreign Minister Shimon Peres that they were committed to ending corruption, terrorism and incitement.
Mr. Peres, in Copenhagen Thursday for talks, said Israel was ready to let 30,000 Palestinians work in Israel and would gradually release funds to the Palestinian Authority if it could be assured the money would not finance terror attacks.
In Washington last week, the Bush administration said it was opposed to a bill called the "Arafat Accountability Act" that would bar visas to Palestinian officials unless the PA turned over murder suspects to Israel and moved to end suicide bombings.

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