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06JERUSALEM1508 2006-04-12 14:36:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Jerusalem
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1. (SBU) Summary: The United Nations Office for the
Coordination of Humanitarian Affairs (OCHA) head described on
April 11 the likely humanitarian risks facing the West Bank
and Gaza Strip in the coming months and the UN's contingency
planning for what he described as a "predictable and
inevitable crisis." Funding for the UN's Consolidated
Appeals Process (CAP), totaling USD 215 million for 2006,
remains the top priority. The UNRWA Deputy Commission
General said the PA's likely failure to pay salaries and
provide services would directly impact 50 percent of the
Palestinian refugees in the West Bank and Gaza. The UNDP
Special Representative noted that Gaza crossing closures
limited the availability of construction materials in Gaza,
thereby slowing down UNDP's few fully-funded job-creation
construction projects. End Summary.

Humanitarian Risks


2. (SBU) OCHA head David Shearer reviewed the humanitarian
risks facing the West Bank and Gaza with donors April 11. He
based his presentation on three scenarios, largely based upon
the World Bank's March 15 Economic Update and Potential

-- Scenario 1: Current situation but no abrupt change in PA
funding. PA receives aid as in 2005 (USD 360 million). PA
receives Israeli transfers as in 2005 of USD 790 million.
Israeli security measures intensify with continued
restrictions on Palestinian movement and access to services.
(Comment: This is simply a planning scenario, and no one
expects this level of assistance. End comment.)

-- Scenario 2: Current crisis plus limited and erratic
funding of the PA. PA receives limited funding (USD 230
million) from Arab countries, while Western funding is
withdrawn. Western donors identify alternative financing
mechanisms separate from the PA. Donor contributions are
delayed by banks' halting of transactions with the PA. The
liquidation of PA assets and borrowing from banks is delayed.
GOI suspends revenue transfer that it collects on behalf of
the PA. In addition to the security trends mentioned in
Scenario 1, violence from unpaid security staff limits
operations of international workers and organizations.

-- Scenario 3: Current crisis and no funds available for the
PA. All aid to the PA is halted. GOI suspends revenue
transfer that it collects on behalf of the PA. In addition
to Scenario 2, the PA loses control of security and
privatized security is offered by armed groups. The economy
slides into a collapse far worse than in Scenario 2.

UN agencies' contingency planning


3. (SBU) Shearer said the UN agencies were using the second
scenario as the basis for their contingency planning. He
stressed that if the PA stops delivery of services, it will
be felt immediately since, the PA runs most hospitals,
two-thirds of all health clinics, and 75 percent of schools.
With the poverty rate at 56 percent and anticipated to rise
above 70 percent, compounded by erratic payment of PA
salaries, the economic outlook was bleak indeed, he said.
The depth of crisis would depend on the amount of funding the
PA received and how the PA prioritized use of those funds.
Shearer stressed that the security situation would determine
the international community's response capability. He
pointed to the continuous feuding in Gaza as an example
indicating the rising level of insecurity. The UN is at its
highest threat level (Phase 4) in Gaza and has reduced the
number of its international staff from 78 to 8 and only
allows movement in Gaza with armed guards.

4. (SBU) Unlike other humanitarian situations, Shearer said
this was a "predictable and inevitable" crisis with a
middle-income, highly urbanized population heavily reliant on
the delivery of services. He stressed that humanitarian
assistance can be quite a blunt instrument and cannot replace
core PA functions. He underlined that UN agencies were not
planning to do so, either. (Comment: UN agencies are averse
to taking over core PA services. UN agencies and NGOs
combined do not have the capacity to fully take over PA
service delivery. End comment.) Even if the UN agencies and

NGOs were prepared to replace some PA services, Shearer
stipulated that it would require some consent from the PA.
He also noted that humanitarian assistance delivery is often
fractured and uncoordinated, but the UN agencies would seek
to respond using a coordinated approach. He said they would
adhere to the principle of impartiality and helping those
most in need. He said the UN agencies are not appealing for
additional funding but are seeking to fully fund the 2006 CAP
(described in reftel) since the projects proposed for CAP
funding remain applicable and appropriate for the immediate
future. Over the next few weeks, Shearer said the UN
agencies would further refine their contingency planning and
circulate a revised appeal.

Refugees will turn to UNRWA
if PA cannot provide services


5. (SBU) United Nations Relief and Works Agency for
Palestine Refugees in the Near East (UNRWA) Deputy
Commissioner General Filippo Grandi told the group that UNRWA
would continued to provide services to refugees according to
its mandate. Noting that as many as 66,000 out of 300,000
refugee households in the West Bank and Gaza received PA
salaries, he said that weakening PA service delivery could
impact up to 50 percent of the refugee population.

6. (SBU) Grandi said UNRWA anticipated a significant
increase in the utilization rate of its basic services as
refugees who currently access PA-provided health, education,
and relief services turn back to UNRWA. He estimated that
UNRWA could see a 25 percent increase in use of UNRWA health
services and 45,000 more pupils in UNRWA schools. He said
UNRWA could expand its emergency employment, food
distribution, and special cash distribution programs in
response. However, he stressed that UNRWA's first priority
is to fully implement currently planned emergency activities
which are severely under-funded. Thus far, UNRWA had
received commitments of USD 17 million (not including the
USG's April 7 pledge of USD 51 million) for its USD 95
million emergency appeal.

UNDP: Trying to generate jobs
through projects, but lack of materials


7. (SBU) United Nations Development Program Special
Representative Jens Toyberg said that, despite having six
fully-funded projects in Gaza totaling 70 million, UNDP
projects were delayed because of a lack of locally available
construction materials due to frequent closures of Gaza
crossings. Before the closures, he noted that UNDP had been
consuming 21 percent of construction materials entering Gaza.
These projects could result in one million person days of
employment in 2006 for Gaza operating at maximum capacity,
the actual impact would likely be much smaller given the
unavailability of construction materials.