THE SECRETARY'S MEETING WITH PALESTINIAN AUTHORITY

C O N F I D E N T I A L STATE 069240 SIPDIS E.O. 12958: DECL: 07/02/2019 TAGS: OVIP CLINTON HILLARY RODHAM EAID KPAL PGOV PREL WBG, IS SUBJECT: THE SECRETARY'S MEETING WITH PALESTINIAN AUTHORITY PRIME MINISTER SALAM FAYYAD, JULY 1, 2009 Classified By: NEA Jeffrey Feltman, Acting, reasons 1.4 (b) and (d). ¶1. (U) July 1, 2009; 4:30 p.m.; Washington DC ¶2. (U) Participants: U.S. -------------- The Secretary William Burns, Under Secretary for Political Affairs David Hale, Deputy Assistant Secretary, NEA Palestinian Authority -------------- Prime Minister Salam Fayyad Manal Zeidan, Director, International Relations ¶3. (C) Summary: The Secretary, joined by Under Secretary Burns and NEA Deputy Assistant Secretary Hale, met with Palestinian Authority (PA) Prime Minister Salam Fayyad in Washington on July 1. The Secretary expressed strong support for the PA and the Prime Minister's leadership, informing Fayyad that the USG intends to transfer $200 million in direct budget support to the PA before the end of July. Fayyad told the Secretary that while there have been improvements in conditions on the ground in the West Bank, Israel needs to do more on access and movement and stop incursions into Area A in order to encourage real economic and institutional development. Fayyad committed to staying engaged in the U.S. legal system in terrorism-related civil cases against the PA/PLO, and asked for USG help in vacating defaults to allow the PA a chance to defend itself. Finally, Fayyad expressed concern that Egyptian-led reconciliation talks could result in an outcome that would make it impossible for his government to function. End summary. Some Improvements on the Ground -------------- ¶4. (C) The Secretary reiterated USG support for the PA government and expressed her appreciation for Fayyad's efforts to reform and build PA institutions. Fayyad told the Secretary that the PA's successful efforts to maintain security in the West Bank were restoring a sense of capability and self-confidence among the Palestinian people. He acknowledged that a reduction in Israeli Defense Force (IDF) incursions into Area A, including Israel's recent moratorium on IDF operations in Bethlehem, Qalqiliya, Ramallah and Jericho, have helped, but said stopping Area A incursions altogether is what is really needed to bolster the image and capability of the PA security forces. Fayyad added that economic activity and a sense of hope in the West Bank have picked up slightly, but Israel must expand and deepen improvements to access and movement to allow economic activity to be significantly and positively affected. Continued Need for Donor Support -------------- ¶5. (C) Fayyad emphasized that the PA's lack of resources remains a serious problem. He said that he is disappointed with the Arab states for not coming forward so far in 2009 with substantial levels of budgetary or other assistance for the PA. Hale briefed Fayyad on the USG's continuing efforts to increase Arab support for the PA government. All agreed that Saudi Arabia is the key, and that other Arab states would continue to hide behind them until the Saudis moved. The Secretary explained to Fayyad that the U.S. hoped to complete the transfer of $200 million in cash assistance under the FY2009 Supplemental to the PA before the end of July. Fayyad was grateful for the USG's package of assistance, which he understood was on the way. Overall, he felt that the U.S. had imposed a higher standard of accountability on donors to deliver pledged assistance, which he felt was new and making a positive difference. Addressing Terrorism-Related Civil Cases -------------- ¶6. (C) Regarding the terrorism-related civil cases against the PA/PLO, the Secretary stressed that the Department is determined to find a way forward -- a solution that would meet the legitimate claims of U.S. victims while protecting the PA from debilitating damage awards. Fayyad observed that the Israeli system gives the Israeli government broad discretion to block court action when Israeli foreign policy or security interests are at stake. He thought, therefore, more effort could be made to try to get judgments vacated and to influence Israeli proceedings. Overall, in describing his legal strategy going forward, Fayyad said that he wanted to play by the rules and acknowledged that Arafat's legal strategy, which now forced the PA to deal with hundreds of millions of dollars in default judgments, had been a disaster. Fayyad recognized that U.S. victims were due something, but noted that the amounts of the default judgments were outrageous. Concern over Palestinian Reconciliation -------------- ¶7. (C) Fayyad was very concerned about the reconciliation talks in Cairo, saying that he had understood that an agreement was in hand, only to be surprised by the news that the process had fallen apart and talks postponed until July 25. He concluded that this must have been the result of U.S. intervention. Hale noted that while the USG had made clear to Abu Mazen and the Egyptians its concerns and redlines, we understood that the parties themselves could not bridge substantive differences - a point that Fayyad acknowledged. Fayyad continued that he did not believe the Fatah negotiators could be relied upon. They are more interested in seizing back the PA government, he said, so would happily reach a reconciliation agreement that was unacceptable to Fayyad, which would force Fayyad either to refuse the terms of the agreement and resign, or accept and be unable to function. Fayyad said that the factional committee idea being pushed by the Egyptians, for instance, would render his government's work impossible. CLINTON