SAUDIS SEPARATE GAZA RECONSTRUCTION FROM PA SUPPORT

C O N F I D E N T I A L RIYADH 000355


E.O. 12958: DECL: 02/24/2019
TAGS: PREL EAID KWBG GCC SA EG SY
SUBJECT: SAUDIS SEPARATE GAZA RECONSTRUCTION FROM PA SUPPORT

REF: JHARRIS EMAILS 2/23 AND 2/24/09

Classified By: PolCounselor Lisa Carle, 1.4(b),(d)


1. KEY POINTS

-- (U) A February 22 meeting of GCC foreign and finance
ministers in Riyadh Gaza decided to establish a "common
program for the reconstruction of Gaza open to all Arab
countries" in cooperation with the Islamic Development Bank
in Jeddah.

-- (U) Program funds will be given directly to
reconstruction projects and not to Palestinian parties or
factions. Initial funding would include $1.2 billion pledged
by Saudi Arabia and Qatar.

-- (C) A Saudi Finance official confirmed February 24 to
visiting treasury DAS Mendelsohn that the Saudis have decided
to treat Gaza reconstruction separately from budgetary
support for the Palestinian Authority (PA).

-- (C) The Saudis told Egyptian FM Aboul-Gheit they remain
firmly behind Egyptian efforts at Palestinian reconciliation,
but that a step forward is needed before the Sharm-el-Sheikh
conference.

-- (U) Saudi media reported that Syrian FM al-Muallim paid a
three-hour visit to Riyadh Feb.24 bearing a letter from
President Assad to King Abdullah.



2. COMMENT

-- (C) The GCC decision to establish a 'neutral' Gaza
reconstruction fund and the Muallim visit are evidence the
Saudis are pressing for a breakthrough on Arab rapprochement
in advance of the Doha Arab League summit. But these events
could indicate the Saudis are also receiving pressure to act
to avoid another messy airing of Arab differences at Doha.
Because Doha is a regularly scheduled summit, the Saudis
likely have less room to maneuver than they did in Kuwait.

-- (C) The GCC agreement does not mean the Saudis are
unwilling to contribute to the PA, but it appears to mean
that any funds for the PA will not come from the $1 billion
Kuwait pledge, and that the Saudis do not want to give the PA
an exclusive franchise for reconstruction at the expense of
Arab unity.

BACKGROUND


3. (U) Initial funding for the GCC/IDB reconstruction
program would consist of the $1 billion pledged by Saudi King
Abdullah in Kuwait and a $250 million pledge from Qatar.
Other GCC members also committed to contribute. GCC
Secretary General al-Attiyah said "the capital of this fund
is to be determined during the international donors
conference" in Sharm-el-Sheikh.


4. (C) Post's working level contact in the MFA Palestinian
Department confirmed the decision that funds from the GCC/IDB
facility would not go through the Palestinian Authority;
rather, he said, reconstruction funding would be given to
"whoever needs it."


5. (C) Vice Chairman of the Saudi Fund for Development
al-Bassam made clear to DAS Mendelsohn that the Saudis have
decided to separate Gaza reconstruction from support for the
PA, and that funds pledged for reconstruction efforts would
not go toward the PA budget. Saudi Deputy Finance Minister
al-Bazai indicated to Post in an earlier meeting that Saudi
funds for the PA budget would be provided directly to the PA.
Separately, an Egyptian Embassy contact told Post a proposed
Arab League fund for Gaza has been put on hold until the
Sharm-el-Sheikh conference.


6. (C) Egyptian FM Aboul-Gheit and Intel Chief Soliman paid
a brief visit to Riyadh February 17. An Egyptian Embassy
contact said the Saudis told Aboul-Gheit they expect a
breakthrough on Arab rapprochement, as they see Syria slowly
moving away from Iran. The Saudis said they see Syria as the
weak link in the chain, in part because Syria's alliance with
Iran is only tactical, not strategic, so the Saudis are
focusing on peeling Syria away from Iran. The contact added
that Egypt shares this analysis and also sees Hezbollah
moving closer to Iran and away from Syria, which could
improve chances for Syria/Saudi reconciliation.


7. (C) In turn, Aboul-Gheit was confident something would be
achieved soon on Palestinian reconciliation because the
Egyptians see Fatah as weakened by the latest violence, with
reconstruction as its only card to play. Aboul-Gheit was
less sanguine about prospects for a Gaza cease-fire following
the Israeli elections, but told his hosts a cease-fire was
not prerequisite for the Sharm-el-Sheikh conference.


8. (C) Muallim's visit follows on the recent public visit to
Damascus by Saudi Intelligence Chief Prince Muqrin. Saudi
media also reported that Saudi business tycoon Prince
Alwaleed bin Talal met Syrian President Assad in Damascus
February 24. Prince Alwaleed does not hold a government
post, but has served as an informal Saudi envoy on issues
related to Lebanon.


FRAKER