1. (SBU) Summary: The Ambassador met December 23 with Pepsi
Gaza CEO Mohammed Yazgi, Gaza Bus Company President Mohammed
Abu Ramadan, and engineer and insurance company head Ahed
Bseiso -- three Gazan businessmen who also lead the private
enterprise organizations PalTrade and the Palestinian
Business Association. The group focused on PA security, with
the Ambassador noting that a clear effort on the part of the
security services to find those who had killed three Embassy
security personnel would encourage the USG to consider
re-entering Gaza. The businessmen emphasized the disarray of
the security services overall and the importance of security
"on the street" to private enterprise. They described Gaza
disengagement as "breaking apart the road map" and noted that
PM Sharon could make the new PA either strong or weak, adding
that they urge the USG to monitor the peace process closely.
On the border crossings, the men related instances of what
they deemed unnecessary IDF-ordered delays, while the
Ambassador described potential positive GOI steps towards
greater freedom of movement. The three agreed to the
Ambassador's suggestion of a joint Israeli-Gazan business
meeting to be arranged by the Embassy. End Summary.



--------------------------


Security: Finding The Killers


--------------------------





2. (SBU) The Ambassador opened the meeting by expressing
regret that USG personnel are not traveling to Gaza in the
wake of the October 2003 killings of three Embassy security
personnel. In response to Ahed Bseiso's comment that this
policy appeared to be "collective punishment," the Ambassador
responded that it was instead a reflection of the USG's deep
dissatisfaction with the way the PA security services
"dropped the issue" after a handful of seemingly productive
meetings. The security services would have to demonstrate
clear effort to solve the case and progress on reform
initiatives, rather than perfection in these efforts, in
order for the USG to consider returning to Gaza.



3. (SBU) The businessmen described the PA security services
as weak and fragmented -- "20 groups" vying with each other
for primacy instead of two or three working together -- and
said that while in some cases the services even know the
identities of criminals, they cannot interfere. More
importantly, Palestinian witnesses to crimes do not come
forward with information because they know the police are
unable to protect them. Abu Ramadan expressed certainty that
this is true in the case of the murder of the USG personnel.



--------------------------


Security is Business' Top Priority


--------------------------





4. (SBU) The three men repeatedly emphasized the importance
of security to the success of Gazan private enterprise.
Pepsi bottler Mohammed Yazgi noted that in meetings with Abu
Mazen the business community has requested security reform
first and foremost, even before requests for economic reforms
and assistance to private enterprise. Bseiso added that
while he believes Gazan police are making an attempt to get a
handle on "street security," they have not succeeded. Arafat
had controlled the security services since 1967, he said --
that culture and mentality cannot change overnight.



--------------------------


Disengagement: "Breaking Apart the Road Map"


--------------------------





5. (SBU) Yazgi, Abu Ramadan, and Bseiso said that while
Israel plans for disengagement and the World Bank and donor
community formulate their responses, Gazans have "no voice"
in the process and no clear picture of what it will mean for
private enterprise. The men said they fear that separate GOI
disengagement policies towards Gaza and the West Bank will
break apart components of the road map, to the detriment of a
negotiated final status.



6. (SBU) The Ambassador responded that the USG views
disengagement as a positive step and will support it as long
as it is not the "end of the road" of GOI engagement. With
Arafat gone, he explained, there is no excuse for Israel, the
PA, or the U.S. not to move forward on the road map. The
three men said they view the U.S. as the only appropriate
third party to diligently monitor road map implementation at
this juncture.



--------------------------


Will Sharon Help or Hinder New PA?


--------------------------





7. (SBU) Bseiso then raised the question of PM Sharon's
willingness to empower Abu Mazen and the new PA leadership.
Both politically and security-wise, he said, Israel has the
power to make the PA either strong or weak. He added that in
his view PM Sharon did nothing to help Abu Mazen when he
became Prime Minister. The Ambassador said that Sharon has
recently begun to believe now is the right time to take
numerous steps he could not take when Arafat was in power.
After the PA elections, he said, it seems Sharon will be
willing to talk to Abu Mazen, and in fact must find a way to
do so regarding disengagement issues like settlement assets
and the maintenance of Israeli-Palestinian business ties.



--------------------------


Movement of Goods and People


--------------------------





8. (SBU) The men expressed their continued vital interest in
the free movement of goods and people in and out of Gaza.
They related a variety of difficulties at the border
crossings, including a recent delay at Erez during the
processing of new magnetic cards for long-term permit holders
that resulted in only 100 cards being issued over a ten-hour
day. Abu Ramadan argued that Rafah has a daily capacity of
over 3,000 people, yet the IDF slashes that number even to
150 when they are "in a bad mood." On the movement of goods,
Yazgi pointed out that it costs a Gazan over USD 4,000 to
import a container of goods from the U.S. -- USD 1,000 all
the way to Ashdod port and USD 3,000 from Ashdod into Gaza
due to delays at Karni terminal.



9. (SBU) The Ambassador said that the World Bank has also
emphasized the importance of freer movement for goods and
people, and added that technological improvements and
possible privatization of terminal operations could
ameliorate the current situation. The USG supports a Gazan
airport and seaport, he continued, and wants to see the
security situation improve to a point where these are
possibilities. Sharon has meanwhile agreed to the
"compromise" of a transport helicopter between Jordan and
Gaza, something he refused to consider six months ago. "We
are 10% of the way" towards a number of World Bank
post-disengagement economic goals, he said.



--------------------------


Planned Gazan-Israeli Business Meeting


--------------------------





10. (SBU) The Ambassador asked the businessmen if they would
like Embassy assistance in arranging a meeting with Israeli
counterparts to discuss economic aspects of Gaza withdrawal.
The three agreed such a meeting would be beneficial, noting
that they had held similar meetings in the past with good
results. They added that the Gazan private sector is
planning a conference on disengagement in the coming weeks
that will address issues like the crossings, agribusiness,
settlement assets, and industrial zones. They agreed to
liaise with Embassy Economic section to arrange a joint
Israeli-Gazan business meeting that may include working-level
GOI interlocutors as well as representatives from the private
sector.

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