By Scott Wilson
Washington Post Foreign Service
Saturday, February 18, 2006
JERUSALEM, Feb. 17 -- On the eve of Hamas's entry into the Palestinian government, Israel's acting prime minister, Ehud Olmert, and his senior advisers neared agreement Friday on a series of steps that would effectively isolate the Gaza Strip and deprive the nearly bankrupt Palestinian Authority of funding once the radical Islamic group forms a cabinet, according to Foreign Ministry officials.
Core members of Olmert's cabinet did not decide how to proceed after Saturday, when Hamas, designated a terrorist organization by the United States and the European Union, becomes the majority bloc in the Palestinian parliament. The decision was postponed to give Palestinian leader Mahmoud Abbas, whose fractured Fatah party will soon be a minority, the opportunity to address the incoming parliament without new Israeli policies as a backdrop.
"We don't want to preempt anything," said Mark Regev, the Israeli Foreign Ministry spokesman. "We want to see what the Palestinians are going to do Saturday -- what is said and what is done."
Olmert's cabinet is considering about a dozen policy options, according to officials who spoke on condition of anonymity. Much of the debate Friday focused not only on which options to implement but also on their timing, the officials said.
The recommendations, which the cabinet is scheduled to decide on Sunday, include preventing the 4,000 Palestinians in Gaza who work in Israel from continuing to do so, tightening already restrictive procedures at crossing points between Gaza and Israel, canceling permits for Palestinian legislators to travel between the strip and the West Bank, and prohibiting further preparations to reopen Gaza's seaport and international airport. In addition, officials may decide to stop handing over the roughly $55 million a month in sales taxes and customs fees that Israel collects on behalf of the Palestinian Authority -- transfers that account for about a third of the authority's operating budget.
Olmert decided Friday to prevent Hamas legislators in Gaza from attending the Saturday swearing-in ceremony for the new parliament in the West Bank city of Ramallah. The legislators, including some of Hamas's top leaders, will participate by teleconference.
The package of recommendations was compiled by Israeli officials responsible for the country's security and diplomacy, and it is being shaped in part by the politics of Israel's national election campaign. Officials involved in the discussion said the emerging response should not be viewed as punitive but as reflecting the security concerns that will arise when Hamas takes control of parliament and various ministries.
Israeli officials have said they will allow humanitarian aid to reach the West Bank and Gaza Strip and continue supplying the territories with electricity, a service some defense officials had suggested should end once Hamas joins the government.
But the Israeli moves under consideration would mark a sharp break with the Palestinian Authority and largely abandon Abbas, who as president of the authority maintains explicit control over its security services and has the power to fire the Hamas-appointed prime minister. They also point to Olmert's preferred path if he wins at the polls next month, setting the stage for further unilateral steps to separate Israel from the Palestinian population in the territories.
The Israeli strategy is designed to influence the Hamas leadership -- which has refused international demands that it renounce violence, recognize the Jewish state and abide by previous agreements -- before it forms a cabinet sometime next month. The Palestinian Authority had been dominated by Abbas's secular Fatah party until Hamas, formally known as the Islamic Resistance Movement, won 74 of parliament's 132 seats in elections last month.
"There is an inextricable link between the larger questions about the future of the West Bank and the peace process and the steps we take in the next month," said an Israeli official who declined to be named because he is not authorized to speak publicly about the subject.
With Israel's elections less than six weeks away, Olmert is charting the country's approach to Hamas despite charges by political rivals that his Kadima party is responsible for its shocking victory. Opinion polls show Kadima winning as many as a third of the Israeli parliament's 120 seats in the March 28 elections, far more than its nearest challenger.
While taking a hard line against Hamas may be politically popular, the strategy risks causing the Palestinian Authority to collapse.
As the recognized occupying power in the Palestinian territories, Israel is responsible for the welfare of the 4 million people who live there. The Palestinian Authority, supported by more than $1 billion a year in foreign aid, has provided many essential services since it was created under the terms of the 1993 Oslo accords. Its collapse would require a more direct Israeli role in the territories just as Olmert is trying to implement the popular agenda of reducing Israel's presence there.
"It's a choice between very bad alternatives," the Israeli official said. "Our dilemma is whether we want to allow the Palestinian government to fail on a big scale. But what if Hamas does not fail? What if they succeed?"
Even after the new parliament is sworn in, Abbas will maintain broad powers over diplomatic and security issues, as well as the cabinet itself. He also remains in charge of peace policy with Israel as head of the Palestine Liberation Organization, which does not include Hamas.
Any financial squeeze Israel might apply would rely on the participation of donor nations, which supply much of the Palestinian Authority's operating budget. This week the United States, which in the past has provided little direct aid to the Palestinian Authority, demanded that the Palestinian Authority return $50 million that President Bush had given in May to show support for Abbas, the State Department said Friday.
The money was intended to fund projects in Gaza after the Israeli withdrawal last year, but the Palestinians so far have spent only about $600,000 of it, the State Department said. Abbas agreed to return $49.4 million but was furious at the U.S. demand, according to a source close to the Palestinians.
On its own, Israel exercises direct control over the Palestinians' revenue through its monthly transfer of sales taxes and customs fees.
Olmert authorized the transfer that was scheduled to be made shortly after Hamas's election. But Israeli officials have indicated that transfers will probably be frozen once Hamas joins the government. A decision on the next one must be made by the end of the month.
Those funds are essential in helping the Palestinian Authority pay salaries to approximately 150,000 employees and trainees, 72,000 of whom work for the security services. International agencies estimate that nearly 1 million Palestinians depend on wages from the Palestinian Authority for their livelihoods.
Many of them are followers of Fatah, whose leaders have so far rejected Hamas's invitation to join the next cabinet. Fatah leaders say Hamas should be given the opportunity to fail on its own.
"It doesn't make sense for Fatah to boycott the government if the president is still Fatah," said Ziad Abu Amr, who won a legislative seat running as an independent from Gaza with backing from Hamas. The new majority party would also have to compromise, he suggested. "Hamas has to adapt to this new reality like everyone else."
The Bush administration sought to weaken the post of the Palestinian Authority president when it was held by Yasser Arafat, the late leader whom U.S. and Israeli officials considered an obstacle to the two-state solution outlined in the U.S.-backed peace plan known as the "road map." U.S. officials successfully pushed for the creation of the prime minister's post -- which was first filled by Abbas -- but Arafat retained control of the security services and the cabinet.
Under the Palestinian Basic Law, Abbas remains the "supreme commander" of the security services and serves as chairman of the National Security Council. He also has authority to fire the prime minister and disband the cabinet.
But the law does not give him the ability to dissolve the legislature and call early elections, and the outgoing parliament declined to give him that authority in its final session this week. It did, however, authorize Abbas, known commonly as Abu Mazen, to appoint members of a constitutional court with the power to rule on the legitimacy of future laws.
"By voting last-minute laws, Abu Mazen showed that Fatah is ready to do anything to protect its corrupt system," said Ahmed Hadj Ali, a Hamas legislator whom Israel released from jail this week. "Maybe the people will be forced to ask for a new presidential election because he is not respecting their will."
Staff writer Glenn Kessler in Washington contributed to this report.