BETHLEHEM: TOURISM SURGES, COMMERCE HINDERED BY

UNCLAS SECTION 01 OF 02 JERUSALEM 001915 SENSITIVE SIPDIS NEA FOR FRONT OFFICE; NEA/IPA FOR GOLDBERGER/LENTZ; NSC FOR PASCUAL; TREASURY FOR AHERN DEPT PLEASE PASS TO USAID FOR ANE/MEA:MCCLOUD/BORODIN E.O. 12958: N/A TAGS: ECON EFIN ETRD KWBG IS SUBJECT: BETHLEHEM: TOURISM SURGES, COMMERCE HINDERED BY ACCESS RESTRICTIONS ¶1. (SBU) Summary: Bethlehem businesses continue to suffer under the requirement to export goods via Tarqumiya, a crossing point nearly 40 kilometers south of the city. Hotel occupancy is surging as a result of increased numbers of visitors, although tour guides, drivers, and businessmen continue to seek more permits. Local officials also described steady initial progress on the French-sponsored Bethlehem industrial zone. End Summary Bethlehem businesses suffer lack of access -------------- ¶2. (SBU) Samir Hazboun, Chairman of the Bethlehem Chamber of Commerce, told EconOff that Bethlehem businesses are still desperate for alternatives to the Tarqumiya crossing as a means of transporting goods to Israel and Jerusalem. He said increased transportation costs and damage done to goods during the screening and back-to-back transfer process at Tarqumiya is slowly suffocating Bethlehem businesses. Some are choosing to send small quantities of goods out via private car, he said, while others are simply giving up. ¶3. (SBU) Hazboun said he requested Israeli Civil Affairs to allow more trucks from Bethlehem to use closer checkpoints -- specifically al-Walaja and Tunnels, as well as another access point near Daniel settlement. He said he is also pushing the GOI to accelerate work to open Al-Nu'man/Mazmouira for commercial traffic. (Note: Currently, only trucks carrying stone and marble are allowed to use Tunnels checkpoint, and only during restricted hours. Fifty-five to sixty pass through per day. Most other trucks are diverted 39 km south to Tarqumiya. End note.) According to Hazboun, Bethlehem bakers send 20,000 loaves of bread to Jerusalem each morning, most through Tarqumiya (a 100 km one-way trip). Tourism -------------- ¶4. (SBU) Bethlehem hotel occupancy rates are at record levels in 2008, and the demand is "beyond capacity." Ministry of Tourism official Majed Ishaq reports occupancy rates averaging over 85 percent in 2008 (compared to 35 percent in 2007),and Bethlehem hotels "99 percent" booked through the end of November. Ishaq attributes the increase to improvements in the political atmosphere, as well as public and private sector efforts to promote Holy Land tourism and the absence of major security incidents. Hazboun said four new hotels are being built in Bethlehem. ¶5. (SBU) According to Hazboun, only 45 Palestinian tour guides have permits to enter Israel, though the demand is much higher. In addition, Arab-Israeli tour guides and bus drivers are prohibited from entering the West Bank for security reasons. Hazboun said Arab-Israeli guides and drivers, despite the prohibition, are sometimes allowed to enter through the Rachel's Tomb checkpoint. When they are turned away, buses travel ten minutes down the road to Tunnels checkpoint (where they pass easily) and enter Bethlehem via a side road. Hazboun said GOI officials are aware of this workaround and do not interfere, but would not agree to standardize access for Arab-Israeli drivers and guides via Rachel's Tomb. Bethlehem Industrial Zone -------------- ¶6. (SBU) Hazboun reports steady progress in the planning stages of the Bethlehem Industrial Zone, a joint project with the French Government announced during President Sarkozy's visit earlier this year. The land identified for the industrial park is entirely located in Area A and is owned by the PA Ministry of Awqaf and private citizens. The closest checkpoint will be Al-Nu'man/Mazmouria (when open). ¶7. (SBU) The acquisition of the land will not be without difficulty, as more than one hundred private land owners have been identified and only a few can prove ownership. Hazboun said he wants to keep the project low-profile, in contrast to other proposed industrial parks, where, he believes, expectations have been raised and land owners have been able to hold projects hostage. Trader Permits -------------- ¶8. (SBU) According to Hazboun, Bethlehem businessmen JERUSALEM 00001915 002 OF 002 currently hold between 650-700 trader/businessman permits. There are also 4,000 worker permits and 142 businessman cards (BMCs) held by Bethlehem residents. (Note: Trader permits are valid for three months and grant daytime access to "Green Line" Israel; BMCs are valid for six months and some allow overnight stays.) Hazboun said he has given up trying to facilitate individual trader permits, so he does not know how many requests are pending. Individual Palestinian businessmen who meet age and other requirements apply directly to the GOI via the DCOs. ¶9. (SBU) Hazboun remains involved in a few permit cases that have dragged on for years. He said one case involved the only distributor of maternity clothes in the West Bank, married to an East Jerusalemite and therefore apparently unable to secure a permit from the GOI. Hazboun said a 63 year-old baker with U.S. legal permanent residence is facing similar difficulties. WALLES