JERUSALEM MEDIA REACTION (03/03): "GREAT RECONSTRUCTION

UNCLAS SECTION 01 OF 02 JERUSALEM 000376

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WHITE HOUSE FOR PRESS OFFICE, SIT ROOM
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TAGS: PREL KMDR KPAL KWBG KPAO IS
SUBJECT: JERUSALEM MEDIA REACTION (03/03): "GREAT RECONSTRUCTION
AMBITIONS FACE HUGE OBSTACLES"

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Main Stories:
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The three dailies lead with news that donors pledged $4.48 billion
in aid to the Palestinian economy and Gaza reconstruction at the
March 2 Sharm El Sheikh conference. The papers note that speakers at
the conference called for implementing the two-state solution,
achieving Palestinian reconciliation and opening Gaza crossings. The
papers highlight statements by Palestinian Authority President Abbas
and Premier Fayyad calling for an end to the Israeli occupation
through political means in order to prevent having to, "reconstruct
after every Israeli aggression."

All front pages report extensively on remarks and statements made by
Secretary Clinton at the Gaza reconstruction conference. The papers
note that Secretary Clinton hopes to see the establishment of a
Palestinian state this year, adding that the U.S. joins other
countries in providing aid to meet the needs of the Palestinian
people. Clinton further highlighted that the U.S. has pledged more
than $900 million in initial, emergency assistance to the Gaza
Strip. She underlined that the conference symbolized two important
things: The commitment of the international community to provide
immediate, emergency assistance to meet humanitarian needs in Gaza
and assist the Palestinian Authority in improving the lives of
Palestinians in both the Gaza Strip and the West Bank; secondly, to
provide assistance to promote a comprehensive peace and the
two-state solution. Clinton further stressed that she is working
with the Palestinians to pave the way for the establishment of a
Palestinians state that is independent, accountable to its people
and lives in peace with Israel and neighboring Arab states,
according to reporting. Finally, Clinton expressed support for the,
"just and specific" demands by Palestinian Authority President Abbas
and Premier Fayyad, describing them as helpful to many aspects of
peace and Gaza reconstruction, and noted that she will meet with
both leaders in Ramallah on March 4.

Front pages report that Clinton expressed concern over continued
rocket fire from Gaza against Israel during the Gaza donors'
conference and called on all parties to work towards achieving a
sustained peace. On Hamas, she stated that Hamas is an entity, not a
state, and needs to understand that in order to engage with the
international community, it must meet certain requirements.
Regarding Iran, reporting notes that Clinton explained that the U.S.
is discussing related issues with friends and partners in Egypt,
Jordan and the Gulf and is open to dialogue.

The three dailies run front page coverage of a report by the Israeli
"Peace Now" organization revealing Israeli plans to double the
number of Israeli settlers in the West Bank by building 73,000
housing units and 5,700 in Jerusalem. The papers also report on the
demolition of two Palestinian houses in East Jerusalem's Silwan area
on March 2. Papers report that Palestinian Authority Presidency
Spokesman Abu Rudaynah called the Israeli settlement plans, "a blow
to the peace process." The papers also detail how the Israeli
Jerusalem municipality will implement demolition orders in three
phases in the southern, northern and southeastern parts of the city,
according to Palestinian sources. Papers do not expect that Israel
will demolish more Palestinian homes during the visit of Secretary
Clinton.

Al Ayyam runs front page statements by Italian Premier Berlusconi
reiterating his call for a "Marshall plan" for the Palestinian
economy and the construction of an airport in the West Bank to serve
pilgrims. Berlusconi will present his plan at the upcoming G-8

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meeting, according to reporting. --------------
BLOCK QUOTES:
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1) Independent Al-Quds editorializes in, "Great Reconstruction
Ambitions face Huge Obstacles,"(03/03): "The Sharm el-Sheikh
conference for rebuilding Gaza and supporting the Palestinian
economy may form an important basis for achieving the goals of the
conference, especially in light of strong international
participation and generous pledges... However, the biggest problem
and most dangerous obstacle remains - the current state of
Palestinian division. The plans for supporting and funding the
reconstruction of Gaza clearly bypass Hamas which controls the Gaza
Strip. Naturally, such a situation will anger Hamas... Thus, it is
pivotal that the issue of forming a national unity government be
resolved quickly... Without forming such a government, it might
prove impossible to implement most of these [reconstruction]
projects."

WALLES