Transcripts: Money to Palestine, Economic Pressure on Israel?

On Friday, the U.S. State Department stated that $200 million, as part of a $900 million pledge from March, was on the way to the Palestinian Authority. On the same day, Deputy State Department spokesman Robert Wood said, "It's premature to talk about imposing economic sanctions on Israel."

So could this really be a new American economic approach to carrots-and-sticks on Israel and Palestine? There is no problem with the $900 million pledge to Palestine but there may be a problem on the 2007 Memorandum on Understanding calling for $30 billion. over 10 years, to Israel?

The Statement on Direct Budget Assistance to the Palestinian Authority:

The United States is the leading provider of bilateral economic and development aid to the Palestinians, providing an estimated $2.5 billion through USAID since 1993. The $200 million in direct budget assistance to the Palestinian Authority (PA) that the Secretary announced July 24 represents the single largest transfer of budget support to the PA from any country since its inception. It is a part of the $900 million pledge for 2009 that the Secretary announced at the March 2 donors’ conference in Sharm al-Sheikh to address the immediate needs of Palestinians in the West Bank and Gaza and support our longer-term approach of fostering the conditions in which a Palestinian state can be realized.

The United States is committed to improving the humanitarian situation in Gaza. In 2009, the United States has provided more than $72 million to date in humanitarian assistance to the people of Gaza through the United Nations Consolidated Appeal (CAP) and other partner organizations.

In 2008, the U.S. was the single largest national donor to the Palestinian Authority. The U.S. exceeded its Paris Donors’ Conference pledge of $555 million (December 2007), committing more than $600 million in assistance to the PA in calendar year 2008, including:

· $239 million for activities in economic growth, democracy and governance, food assistance, education, health, and water supply to the PA.

· An additional $300 million in direct budget support to the PA for debt owed to commercial vendors and financial institutions.

· $75 million for security sector reform.

In addition, in fiscal year 2008 the U.S. provided $184.7 million in Migration and Refugee Assistance (MRA) and Emergency Refugee and Migration Assistance (ERMA) funds to United Nations Relief and Works Agency (UNRWA) for assistance to Palestinian refugees in the West Bank, Gaza, Jordan, Lebanon, and Syria.

Robert Wood's statement:

QUESTION: Would U.S. be ready to exert some financial pressures on Israel to convince the government to stop settlements?

MR. WOOD: Well, Sylvie, it’s premature to talk about that. What we’re trying to do, as I said, right now is to create an environment which makes it conducive for talks to go forward. And as I said, Senator Mitchell is working very hard on this. And what we all need to do in the international community is support this effort, and that means Americans, that means Arabs and Israelis, to do what they can to kind of foster a climate in which the two sides can come together and negotiate their differences peacefully so that we can get to that two-state solution.

QUESTION: But Robert --

MR. WOOD: Yes.

QUESTION: Dan Meridor has said – that the agreement we had with the Americans is binding on us and them. And he added that they should keep to the agreement. He’s calling the U.S. to keep to the agreement.

MR. WOOD: I think we’ve been very clear with regard to settlements. They need to stop, and that includes natural growth. I don’t have anything more to add to that. The Israelis are well aware of our position. And we’ll obviously continue to have talks with the Israelis on this subject and other issues, but our policy remains the same.