PA BUDGET DEMARCHE: ALGERIA PLEDGES SUPPORT

C O N F I D E N T I A L ALGIERS 000122 SIPDIS DEPT FOR NEA/IPA - ALENTZ E.O. 12958: DECL: 02/04/2019 TAGS: EFIN PGOV PTER PHUM KPAL KWBG AG SUBJECT: PA BUDGET DEMARCHE: ALGERIA PLEDGES SUPPORT WITHOUT TIMETABLE REF: STATE 087722 Classified By: Acting DCM Mark Schapiro; reasons 1.4 (b, d). ¶1. (C) In response to reftel, MFA Acting Director of Arab League Affairs Mourad Merhoum told us that Algeria's support for the Palestinian people was a matter of principle, and that Algeria would continue its annual contributions of roughly USD 50 million to the Palestinian Authority (PA) through the Arab League. Merhoum said he would convey to his superiors our demarche request for immediate PA budget support, but suggested that if we had an urgent timetable regarding specific funding needs, a high-level appeal such as a letter from the Secretary to Foreign Minister Medelci would be appropriate, as was done in the past on similar matters. He pointed out that the sharp divisions between Hamas and Fatah raised the fundamental question of who should be the interlocutor on behalf of the Palestinian people, a critical question for foreign donors. ¶2. (C) Turning to the peace process in general, Merhoum said that George Mitchell's recent trip to the region was a positive indication of the Obama Administration's commitment to resolving the ongoing conflict. He stressed, however, that many in the region remain skeptical. Merhoum said that the fighting in Gaza and the current reconstruction efforts have highlighted the divisions between Hamas and Fatah, which needed to be addressed before progress could be made on determining how to administer support for humanitarian and reconstruction efforts in Gaza. He acknowledged Egypt's efforts to promote Palestinian reconciliation, but did not hold out hope that an agreement would be reached soon. Merhoum opined that some resolution of the Palestinians' internal disputes and "a significant change in Israeli policies toward the territories" would be needed to bring any sense of "serenity" to the region. ¶3. (C) On the subject of humanitarian assistance, Merhoum underscored the aid Algeria has already dispatched to Gaza, including medical supplies and teams of physicians and psychologists. He also highlighted Algeria's pledge of some USD 200 million to support the Palestinian reconstruction effort, which he said would be donated through the Arab League. Asked whether part of this funding might be used to provide budget support to the PA, Merhoum demurred. He said the money would likely be transferred sometime between now and League's next meeting in March, and that the specific use of these funds would be discussed among the League's members. "You might ask Amr Moussa," he added. ¶4. (C) COMMENT: Algeria is a reliable contributor to the Palestinian cause and will take our request very seriously, particularly if its urgency is underscored by a direct high-level appeal. As our MFA contacts have told us in the past, Algeria channels financial donations through a special Arab League fund and is unlikely to depart from this practice with unilateral action. With donations of goods and services, on the other hand, Algeria does go it alone at times, as was the case with its Gaza relief effort. Merhoum thanked us for our message and said it underscored the need for a credible Palestinian Authority as an essential element in securing stability and peace in the region. He also said that despite the inevitable skepticism concerning the U.S. role in the peace process, the Obama Administration's renewed effort to engage the region was welcome and appreciated. PEARCE