1. (C) Summary: MFA Deputy Director General for Economic
Affairs Yossi Gal told Ambassador Kurtzer that the PA should
promptly seize the opportunity to coordinate with Israel on
the economic and civil aspects of the disengagement plan via
joint GOI-PA working groups on trade, settlement assets,
border crossings, and economic development. Opining that
"the cow wants to give more milk than the calf is ready to
suckle," Gal said there is no credible point of contact on
disengagement issues within the PA. The Ambassador noted
that the USG will encourage the PA to put together working
groups more quickly than the three-to-four weeks Mohammed
Dahlan has requested, but also urged the Israelis to give the
PA time to get organized. He further suggested the GOI spark
PA responsiveness by providing Dahlan with a list of Israel's
current plans and inviting dialogue. The group also
discussed follow-up to the London meeting, with Gal
emphasizing the GOI's continued concern over the World Bank's
indicators exercise. Finally, Gal asked about the donor
timetable and the upcoming AHLC, to which the Ambassador
noted that the USG is currently focused on "creating facts"
via USAID programs and General Ward's discussions with the
PA, rather than on organizational structure. End Summary.



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



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


PA Slow to Engage, GOI Can Encourage Responsiveness


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



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





2. (C) Yossi Gal, head of the MFA's economic bureau, told
Ambassador Kurtzer March 7 that he does not see the PA
"getting its act together" on disengagement issues. The GOI
is prepared with working-level groups on trade, settlement
assets, border crossings, and economic development, Gal said,
and a Minister-level steering committee will meet regularly
on these issues. In Gal's view, however, "the cow wants to
give more milk than the calf is ready to suckle" -- PA
Minister of Civil Affairs Mohammed Dalhan has requested a
full three-to-four weeks before his staff will be ready to
talk to Israel. Gal expressed frustration that there is no
truly empowered point of contact on disengagement issues
within the PA.



3. (C) The Ambassador reminded Gal that until recently, all
aspects of Israel's disengagement plan were unilateral, and
it is therefore difficult to expect immediate PA readiness.
"The PA is building something from scratch," he noted. While
the USG will encourage Dahlan and others to shorten
preparation time before talks with Israel, the Ambassador
suggested the GOI can encourage greater PA responsiveness by
providing it with a detailed list of Israel's current plans
for the economic and civil aspects of the withdrawal. Such a
list would invite PA reaction and would enable Dahlan and the
working-level groups to come to the table ready to engage on
specifics.



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World Bank Indicators Still Unpopular


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





4. (C) Gal raised Israel's continued concern with the World
Bank's indicators exercise, underlining the inequity of
benchmarks as applied to the PA and to Israel. The PA, Gal
said, will be given vague and "poetic" directives such as
"demonstrating effort to improve security," while Israel will
be judged on specifics like the number of checkpoints and
barriers removed. On top of this, he lamented, perceived GOI
failure would only lead to donors "punishing" the PA by
withholding funds. The Ambassador said the GOI would be
advised to contribute to the indicators exercise, instead of
opposing it in principle. In this way, the GOI could help
shape the final product.



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


U.S. Ready to Act, Less Concerned
With Donor Organizational Structures


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





5. (C) Gal asked the Ambassador about the donors' timetable,
and said he understood the USG wanted an early AHLC meeting.
The Ambassador responded that USG focus is now on moving
forward by creating facts and encouraging action. In this
vein, he said, USAID's PAPA program had the positive effect
of sparking PA reaction on the key issue of
post-disengagement agribusiness cooperation. Further, the
USG is "ready to go" on a number of programs to be funded
under the USD 350 million supplemental currently moving
through Congress. General Ward will take a similar posture,
moving quickly to work with the PA security apparatus. The
Ambassador told Gal that the U.S. can step into a stronger
third party role on disengagement if the GOI indicates this
is what it wants.

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