Address by Deputy Prime Minister and Minister of Foreign Affairs Silvan Shalom to the International Donors’ Conference in Rome
10 December 2003

Minister Frattini, Minister Petersen, Ministers Shaath, Fayad, Kasis and Al-Masri, World Bank President Wolfensohn, Distinguished Delegates, Ladies and Gentlemen,

The Israeli and Palestinian peoples have suffered too much in recent years. I am here today to show Israel’s commitment to working together with the Palestinians and the donor community to ease that suffering.

It is highly appropriate that this gathering is taking place in Rome. It was in Rome in 1957 that the partnership we know today as the European Union was begun, and an era of unprecedented European cooperation was launched. This European experience is a testament to what is possible with leadership and vision. The internal integration that Europe now seeks is not our goal. But we can – and, I believe, we should – draw much inspiration and guidance from Europe’s ability to overcome conflict and build partnership for the benefit of its citizens.

For over three years Israelis and Palestinians have suffered the consequences of the Palestinians campaign of terror.  The economic and human devastation on both sides are well known to all in this room. Thousands of lives have been lost, tens of thousands more devastated by injury, and millions affected daily by the impact of terror and economic hardship.

Let there be no mistake. It is the terrorist violence which lies at the root of this suffering and the ongoing stalemate in the political negotiations. It is terror which causes economic hardship, not economic hardship which causes terror.
The key to alleviating the suffering lies in ending the terror.

The Road Map calls, in Phase One, for Palestinian reform and sustained action against terror. This is no accident. Only by proceeding along the Road Map’s performance-based path will the two sides be able to move beyond the violence, return to negotiations and reach a final status accord that will bring peace, security and prosperity.

Israel accepts the Road Map and the vision for peace it contains. We are ready to implement our commitments accordingly. Sadly, there are no shortcuts to realizing this vision. Palestinian reform is urgent. Comprehensive reform. Reform that will lead to responsible government, the rule of law, the dismantling of militias and terrorist organizations, an independent judiciary, the end of the Palestinian campaign of diplomatic incitement in international fora and incitement and education to hatred in their schools and media. The lack of progress on these issues is causing havoc with Palestinian economic and social development, and it is hampering progress in the battle against terror.

Dismantling of the Palestinian terrorist infrastructure is equally urgent. This is not only for Israel’s benefit. Legitimate Palestinian aspirations will not be realized through terror. For their sake as well as ours, the Palestinians must join the international war on terror. So-called "cease-fires" are welcome, but they are not enough. They are a tactical response to what is a strategic, moral and historic imperative. Only the removal of the terrorists from the equation will ensure that the patterns of cooperation we need to build can indeed come about.

Meanwhile, so long as the terrorists continue to seek  to enter our cities and destroy our lives, Israel will continue to exercise its legal right and its democratic obligation to protect and defend its citizens. These acts of self- defence are a legitimate response to an enemy crueler than anyone here should ever know. They are not designed to harm the general Palestinian population, even though we know of their impact. Most important, these measures are reversible. The lives taken by terror are not.

As the much-needed Palestinian war on terror proceeds, Israel will be able to cut back on its defensive measures, with obvious benefits to the populations on both sides.

I am convinced, however, that we shouldn’t  wait. Even during this Palestinian violence, Israel has continued to transfer tax revenues to the PA. We have transferred 2 billion Shekels of revenue, under the terms of an agreement I negotiated while serving as Finance Minister in the previous government. Just as we must be determined in our action to dismantle the infrastructure of terror, so must we be determined in building an infrastructure for peace. To this end, alongside the implementation of the Road Map, I call on the Palestinians to design, together with us, a positive agenda for immediate action on humanitarian/economic issues.

Of course, the Palestinians – not we – are the ones who must determine their economic priorities. But I am convinced that if we are able to build here a joint set of priorities – together with the donor community – then we will be able to make real progress. I have been engaged for many weeks now in a coordinated Israeli effort to address these issues. I and my staff have been in regular  contact with the Palestinian side, as well as with the representatives of the donor community, in order to develop this initiative.

From these discussions, I have come to the conclusion that we need a practical approach, which looks at the needs on the ground and works from there.

Allow me to list some ideas. These ideas are not new, but they offer real benefits as a the starting point for further action:

• Focusing on infrastructure restoration

• Industrial parks. The positive experience of Erez, which has remained open throughout the last three years, can, I believe, be applied elsewhere. Unfortunately, other industrial parks have suffered from persistent Palestinian attacks. While Israel is willing to allow Palestinian labour into Israel, subject to security concerns, exporting goods and services to Israel, rather than labour, may well be a better long-term option.

• Renewal of the small business and commercial centres on the seam- line, where the patronage of Israeli consumers before 2000 was bringing in over half a billion dollars of income to the Palestinian economy per annum.

• Rejuvenating cooperation on post-harvest activities for the flower and strawberry industries.

• Building joint tourism projects and priorities  for the benefit of Bethlehem and Jerusalem.

• Cooperation in the fishing industry, particularly fish farming in salt-water ponds.

• Utilizing  the  experience and skills of the Israeli Mashav programmes for international cooperation. In the year 2000 over 800 Palestinians received training in Mashav workshops. With donor support, there is no reason this activity cannot be renewed.

In order to coordinate our joint efforts to build and implement such a positive agenda, I suggest that we establish a tripartite working group composed of Israeli, Palestinian and donor representatives. While I am aware of growing donor fatigue, I urge the donor countries to maintain their involvement. We are ready to help facilitate this involvement as best as conditions allow. Donor action is critical to ensuring  progress on economic development and real reform.

Efforts to kick-start the Palestinian economy will help gradually reduce the need for humanitarian assistance and facilitate the channeling of donor resources back towards development and long-term projects. These efforts will also no doubt have a positive effect on the political and security arenas.

I have instructed my delegation to this meeting, headed by Ambassador Yossi Gal, to continue discussions here in order to translate these ideas into agreed action.


The agenda I have set forth will not be easy to implement. Responsible leadership will be needed from all concerned, particulary from the Palestinian side. If such leadership is forthcoming – if we see the decline and end of terror and real reform –  then the prospects for both of our peoples are endless. I pledge to you here today my commitment to working together with you to bring to life our shared vision of Israelis and Palestinians living side by side in peace, security and prosperity.

Thank you.