Regional Strategic Challenges in the Middle East

Speech by Director General of the Israel Ministry of Foreign Affairs, Mr. Eytan Bentsur

Conference to Support Middle East Peace and Development
Washington, D.C.
November 30, 1998

Mr. Chairman, distinguished members of the dais, ladies and gentlemen,

Allow me to begin by expressing our deep appreciation to the hosts, the President of the United States of America, and Secretary Albright for the important and long-standing contribution towards the achievement of a true peace in our region. We commend President Clinton’s call to strengthen bilateral and regional cooperation, thus creating an atmosphere conducive to peace. The resumption of normalization and the multilateral tracks is yet another peace dividend.

Also I would like to thank the Russian Deputy Foreign Minister and the Norwegian Foreign Minister for successfully directing the donors framework, a role that Norway has played with great ability since its inception, and the representatives of the European Union for the extensive European assistance to the Palestinian economy.

This conference is taking place today in Washington, the very place where the Wye Memorandum was signed just over a month ago, an accord that represents a significant step forward in the peace process. We aspired that the Wye River Memorandum will bring with it a new spirit of hope to our peoples and region. I was therefore disappointed to hear Chairman Arafat’s remarks this morning which are neither in the spirit nor letter of the agreement just signed. The time has come to open a new chapter in the process. It was lamentable to elaborate on the motion of closure when everybody in this hall knows that for more than a year and a half Israel has imposed no closure.

This conference should serve to show that the peace process must not remain only in the political sphere. It must be strengthened by social and economic agreements which will improve the quality of life of the people of the region in general, and of the Palestinians in particular, and contribute to a stable and lasting peace. Israel wholeheartedly shares this belief. The international community has been very active in the last five years in assisting the Palestinian economy. Israel has taken an active part in this assistance. But we all know, this has not always been easy: the difficult security situation and the terrorist attacks that we have suffered have undermined the stability of the region, which is a precondition for any economic growth.

Closures have never been Israel’s choice. Much has been said here today about the effect of closures on the Palestinian economy. Unfortunately we find it necessary to remind this assembly of the reasons that led to imposing closures. Closures have never been Israeli policy, but a last resort reaction to vicious terrorist attacks. We don’t want to dwell on exaggerated numbers referring to the so-called cost of closures, but leave with you a thought of how many human lives have been saved by us taking precautions to protect our citizens. I wonder how countries gathered here would have reacted had they been subjected to acts of terror. That is why any advice to do otherwise when it comes to Israel is absolutely redundant.

Recognizing the importance of employment in Israel for Palestinian household earnings, we have taken many steps in recent years to widen the circle of Palestinian employment. As a result of these steps the number of Palestinians employed in Israel has risen significantly. This is Israel’s policy, which takes risks for peace and for strengthening the Palestinian economy.

Israel intends to continue this policy in cooperation with the Palestinian Authority, based on the following principles:

– Increasing the number of Palestinians employed in Israel by adding 50,000 workers with permits.

– Employment stability, a principle upon which the continuous employment program is based, which was implemented successfully for the first time some two months ago, and which enables tens of thousands of workers to go on working in Israel, even during periods of high security tension.

– Cooperation with the Palestinian Authority in creating employment opportunities.

In addition, we have been active in promoting the private sector, which represents the future engine of growth for the Palestinian economy. In order to achieve this goal, we have taken a number of steps, including the following:

– Supporting the establishment of industrial zones, with the aim of creating tens of thousands of employment opportunities, and promoting industrial infrastructure in the territories.

– Assisting Palestinian businessmen and facilitating their movement. To date, 21,00 permits have been issued.

– Improving the efficiency of the passages, so as to facilitate the movement of peoples and goods.

– Improving import and export procedures.

– Assisting specific economic sectors.

International assistance and aid to support peace in our region is of vital importance. This aid should continue to be directed at specific programs with maximum transparency and accountability to guarantee best results, and everyone around should share this goal. Everybody in this hall knows full well why transparency is so badly needed.

The economic relations between Israel and the Palestinian Authority are based on the Economic Protocol of the Interim Agreement – the Paris Protocol. As a result of this agreement, Israel is transferring significant sums to the Palestinian Authority that make up more than 60 percent of the revenues of its budget. This year Israel has transferred some 500 million dollars. In the last five years we have transferred to the Palestinians more than 1.7 billion dollars.


We are gathered here today not merely to review achievements of the past but mainly to prepare ourselves for future challenges. When we analyze the situation in the Middle East in general, and our region in particular, one issue is of paramount importance: the water problem.

The region faces a common and critical problem – the serious shortage of water. This problem has existed ever since the days of the Bible. It affects our basic ability to develop and survive. Within fifteen years, there will be a shortage of hundreds of millions of cubic meters. We have to start acting immediately! The only solution is desalination of the seawater. The international community together with the people of the area should strive to create high capacity desalination projects which can be built in stages. It is our belief that we should start the implementation of desalination projects for Gaza.

Israel believes that the donors have played a very substantial role in the advancement of the Palestinian economy. Therefore the existing frameworks of the donors is the most efficient and appropriate. In Wye Plantation both Prime Minister Netanyahu and Chairman Arafat agreed that peace in our region will be achieved through negotiations and understanding. It was also agreed that parties will refrain from unilateral acts. We were appalled by remarks made earlier today. We would appreciate Chairman Arafat’s commitment to work in unison with Israel to resolve our differences. The parties must adopt a new code of conduct that will resolve problems in direct bilateral negotiations and not through castigation.


We are ready to continue to take upon ourselves calculated risks to enhance peace, security and economic growth for the benefit of the Palestinians and the entire region. This will be possible only in an environment of security, stability, cooperation and mutual understanding and manifestations of normalization.

In this regard, we have decided to pledge 65 million dollars of assistance to the Palestinian economy over the next three years, of which 15 million dollars are to be utilized in the areas of water, sewage and infrastructure, and a sum of 50 million dollars in risk insurance for capital investments to Israeli entrepreneurs who will invest in the industrial parks of the Palestinian Authority.