Jerusalem, 29 January 1995 CABINET COMMUNIQUE

(Communicated by Cabinet Secretariat)

At the weekly Cabinet meeting today (Sunday), 29.01.95:

1. Within the framework of the Ministerial Committee on National Security, the Cabinet was briefed on on-going security matters.

2. The Cabinet held a political discussion, after which the Prime Minister and Defense Minister summed up as follows:

A. The peace process will continue based upon the Declaration of Principles and the Cairo Agreement while drawing and implementing lessons from the implementation of these agreements thus far, especially in the area of security.

B. At this stage, the closure will continue for an additional week.

C. The lifting of the closure on laborers from the Gaza Strip will be examined in accordance with the ability of the PLO and the Palestinian Authority to fulfill their obligations, as set forth in the agreements signed with them.

D. Discussion of the issues of a prisoner release and the "safe passage" [between Gaza and Jericho] will remain suspended for the time being.

E. Approval is given for the bringing of 6,000 foreign laborers to work in construction and agriculture, in accordance with the details and conditions to be determined by the Labor and Social Affairs Minister and the Agriculture Minister.

F. The Prime Minister has asked the Attorney-General to prepare an opinion on the possibility of arresting Israeli employers who hire laborers from the territories without permission.

G. The Prime Minister seeks to take action to accelerate legislation to increase fines against those employers referred to in Section F.

H. The Finance Minister, in conjunction with the other relevant ministries and offices, will present to the Cabinet suggestions to alleviate the matter of employment within Judea, Samaria and the Gaza Strip.

I. With the goal of bringing about a separation between the populations of sovereign Israel and of the Palestinians in Judea, Samaria, and Gaza, the Prime Minister has asked the Finance and Police Ministers to set up teams that will examine ways and means to bring about such a separation, as well as the implications with regard to economics and internal security.

The Finance Minister has been asked to form a team that will examine the economic issues. The Police Minister has been asked to form a team that will examine the area of internal security.

The Ministers will coordinate their proposals with the ministers and various government bodies involved in the matter, and bring them before the Government or Cabinet within one month.

3. The Prime Minister asked the Finance Minister to present a proposal in the near future regarding the implementation of the capital gains taxation law, in such a way that tax will not be levied on losses.