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Cablegate: Fayyad to Codel Boehner: Pa Appreciates Usg

VZCZCXRO4039
OO RUEHROV
DE RUEHJM #0514 0851529
ZNR UUUUU ZZH
O 251529Z MAR 08
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0960
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS JERUSALEM 000514

SIPDIS

SENSITIVE
SIPDIS

NEA/IPA FOR GOLDBERGER/SHAMPAINE/SACHAR; NSC FOR PASCUAL;
TREASURY FOR CONNOLLY; PLEASE PASS TO USAID FOR
MCCLOUD/BORODIN

E.O. 12958: N/A
TAGS: ECON EAID KWBG IS OREP
SUBJECT: FAYYAD TO CODEL BOEHNER: PA APPRECIATES USG
ASSISTANCE


1. (SBU) Summary: Prime Minister Fayyad expressed his thanks
to CODEL Boehner on March 22 for U.S. budget support to the
PA. He said the PA will continue to strengthen transparency
and improve the government's financial sustainability.
Fayyad said he is encouraged by the improved security
situation in the West Bank, but expressed frustration at
continued IDF incursions, claiming that GOI actions undermine
PA efforts to build public support for its security forces.
End summary.

USG Assistance Has Motivated Others
-----------------------------------

2. (SBU) Fayyad told CODEL Boehner on March 22 that the PA is
very thankful to the U.S. for its recent USD 150 million cash
transfer, calling it the largest single tranche of assistance
received in the history of the PA. Fayyad said that USG
action has motivated other donors, like the EU, to accelerate
implementation of their pledges.

3. (SBU) Fayyad said that donor support has allowed him to
pay down debt to the private sector and make nine consecutive
monthly salary payments. The PA has trimmed the public
payroll, taken action to control spending, and is
implementing numerous projects in the West Bank to upgrade
and build roads, schools, youth clubs, and basic
infrastructure. He said the PA has been successful in
implementing small-scale construction projects, which are not
limited by restrictions on access and movement. To increase
the transparency of PA finances, Fayyad said that he would
soon unveil a new website to make public information on PA
revenues and expenditures.

Improved PA Security in West Bank
---------------------------------

4. (SBU) Fayyad said he is encouraged by improvements in the
performance of PA security forces. He underscored that the
PA has taken tough, often unpopular, action in its "culture
war" against Hamas, such as dissolving religious charities
that served as conduits of funds to Hamas. "We continue to
fight the rejectionism prevalent in the region," he said.
Hamas is not as strong as it was, "there are fewer Hamas
flags in West Bank than before." Fayyad said that continued
GOI incursions into Nablus and other West Bank cities,
however, undercut PA security forces' authority. Regardless
of these challenges, concluded Fayyad, his government's goal
is to build the foundations of a viable Palestinian state.

Bethlehem Conference To Encourage Investment
--------------------------------------------

5. (SBU) The Prime Minister said the May 21-23 Investment
Conference in Bethlehem would provide an emotional and
financial lift to the PA. "We need a new image," he said.
He said he aims to boost Israeli as well as foreign
investment in the West Bank to stimulate growth. Fayyad said
that high transport costs resulting from restrictions in
access and movement prevent Palestinian companies from
competing in regional markets. The PA will continue to work
with Israel, he said, to improve the "security versus
business nexus."

6. (U) CODEL Boehner did not have an opportunity to clear
this message before departure.
WALLES

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