USUN AMBASSADOR RICE MEETS WITH PALESTINIAN CIVIL

1. (C) Summary. In an October 22 meeting with USUN
Ambassador Susan Rice, Palestinian civil society in the West
Bank agreed that donors' investments have not yet shown
tangible results on the ground. As one participant put it,
"money is not buying PM Fayyad love." Several participants
noted ongoing public anger with the PA over its handling of
the Goldstone report, and U.S. hypocrisy in the face of major
human rights abuses during the Gaza conflict. Other
participants expressed frustration over the absence of a
settlement freeze, and the demands placed on the Palestinian
side in the peace process. Several participants also
stressed the importance of addressing the ongoing
humanitarian consequences of what one called "the Israeli
siege of Gaza." End Summary.

Not Much Change on the Ground in the West Bank


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2. (C) On October 22, representatives of Palestinian civil
society discussed with Ambassador Rice the continuing
challenges they face in the West Bank. Bank of Palestine CEO
Hashim Shawa opined that while much is being made of the West
Bank economy, there is "nothing on the ground to show change
or economic development." Donor support to the PA budget,
which largely goes to pay salaries, must be accompanied by
private sector development, he said, in order to achieve
sustainable economic growth. Shawa believes that the West
Bank has "huge potential" for sustained investment. He hoped
to build on the 2008 Bethlehem Investment Conference, which
he said had demonstrated the viability and resiliency of the
Palestinian private sector to foreign investors.



3. (C) Dr. Wael al Qadan, Palestinian Red Crescent Society
Chief of Medical Services, said that the Israeli authorities
have not significantly eased humanitarian access in the West
Bank over the past two years. He noted that PRCS ambulances
in the West Bank are unable to access the main Palestinian
hospitals which are in East Jerusalem. Al Qadan added that
within the West Bank, roadblocks force ambulances to detour
by as much as 45 minutes to access Palestinian villages.
PRCS calls to the IDF to build roadblocks that allow
humanitarian access have gone unheeded, he reported.

Public Dissatisfaction with the PA and U.S. Policy


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4. (C) Palestinian pollster Nader Said commented that a
majority of Palestinians in the West Bank and Gaza believe
the USG is not earning recognition for either its political
or its economic support to the Palestinian Authority. Recent
polls also suggest, he said, that Fatah is doing better in
the polls than most educated Palestinians believe. Firas
Yaghi, former Director General of the Palestinian Legislative
Council, disputed this assessment, saying that a majority of
Palestinians do not agree with either Fatah or Hamas.
Palestinians perceive that the two parties are exacerbating
divisions within Palestinian society rather than working to
reunite the West Bank and Gaza, he said.



5. (C) On Goldstone, participants noted broad Palestinian
support for the report's recommendations, although Said
stated that most Palestinians are not familiar with the
report's details. Palestinian anger over President Abbas's
handling of the Goldstone report continues, as does deep
anger at the USG for voting against Goldstone in Geneva.

"Lift the Siege" on Gaza


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6. (C) Three participants stressed the need to "lift the
siege" on Gaza. Hashim Shawa presented a short memorandum to
Ambassador Rice outlining the need for "a new policy towards
Gaza" and proceeded to describe its contents. Gazans, he
said, are highly dependent on UN assistance, noting that
UNRWA is the most significant actor in Gaza countering
Hamas's influence. Gazans feel that they have been forgotten
by the international community, including the USG, he
claimed. Shawa proposed that the USG should immediately
seek to expand humanitarian assistance through normalizing
medical transfers out of Gaza for critically ill patients;
normalize food shipments into Gaza to improve nutritional
content; and ensure that UNRWA can implement all of its
social development activities for children. He also
emphasized the need to rebuild schools, shelters, and private

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sector infrastructure. Shawa specifically mentioned the need
to normalize and stabilize Gaza's banking system, including
sufficient cash supply to the banks, and initiating an
across-the-board, sustainable agricultural program.



7. (U) Ambassador Rice cleared this cable.

RUBINSTEIN