Jerusalem, July 29, 1997

ISRAEL’S ECONOMIC ASSISTANCE TO THE PALESTINIAN AUTHORITY

Notwithstanding the differences between Israel and the Palestinian Authority certain positive developments have taken place over the past few months.

The following figures attest to steps taken by Israel as part of its ongoing commitment to the Palestinian economy and welfare.

1. EMPLOYMENT

More Palestinians are currently employed in Israel than at any other time during the past two years.

Between 100,000 and 120,000 Palestinians are employed in Israel:

– 26,000 are residents of the Gaza Strip, holding work permits;
– 25,000 are West Bank residents, holding work permits; – 3,000 are employed in the Erez Industrial Area and Jewish settlements in the Gaza Strip;
– 7,000 are employed in Jewish settlements in the West Bank;
– an estimated 30,000-50,000 are employed in Israel without permits;
– 10,000 are employed in Jerusalem.

2. COMMERCE

9,000 Palestinian businessmen hold entry permits to Israel. Of these, 5,250 are residents of the West Bank, and 3,750 reside in Gaza. It should be noted that these businessmen, through their companies, generate employment in the West Bank and Gaza.

3. PREPARATIONS FOR THE ESTABLISHMENT OF THE "SAFE PASSAGE" BETWEEN THE WEST BANK AND GAZA

The preparations for the first phase of the "safe passage" arrangement are currently being concluded. In the immediate future, permits to pass from Gaza to Jericho and back will be granted to approximately 600 people a week for a period of six months.

4. TRANSPORT OF GOODS

Between 900 and 1,000 trucks transfer goods to and from Gaza daily.

5. THE TRANSFER OF FUNDS FROM ISRAEL TO THE PALESTINIAN AUTHORITY (import taxes, returns on V.A.T., returns on gas excise tax, income tax and health tax transfers)

Approximately 430 million dollars were transferred to the Palestinian Authority in 1996. An additional 220 million dollars were transferred between January and May of 1997.

A sum total of approximately 950 million dollars were transferred between 1994 and May 1997. These funds constitute approximately 63 percent of the Palestinian Authority budget.

6. INDUSTRIAL ZONES

The preparations for the establishment of the Karni Industrial Zone in Gaza have reached an advanced stage, with ground work already under way. Negotiations regarding the operation of the zone are being conducted by Israel and the Palestinian Authority at an accelerated pace. Israel has allocated seven million dollars for the Karni security arrangements. Preparations are also being conducted for the establishment of an industrial zone in the Jenin area.

7. INVESTMENTS AND DONATIONS

At the first Donor Conference, held at the end of 1993, Israel committed itself to donate 75 million dollars – 25 million in currency and 50 million as guarantees. Out of the 25 million dollars, 10.5 million have been transferred to the Holst Fund, designed to cover recurring costs, seven million allocated to security arrangements in the Karni Industrial Zone, and 7.5 million are earmarked for additional industrial zones.