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Palestinian Authority Facing Financial Collapse

Palestinian Authority Facing Financial Collapse

By Aluf Benn

Posting with permission from: http://www.MiddleEast.Org

[Ha'aretz - 9 February]:
The difficult financial situation faced by the
Palestinians as a result of the Intifada and Israel's
punitive steps heads the list of diplomatic issues for
Prime Minister elect-Ariel Sharon. The matter was the
center of discussion during Sharon's meeting Friday
with American Ambassador to Israel, Martin Indyk, and
United Nations Middle East envoy Terje Larsen.

According to sources in Sharon's office, the American
government estimates that the Palestinian Authority
will collapse within three months if the current
situation continues. Larsen also warned that "The PA
is about to collapse," and presented data to Sharon on
Arafat's depleted accounts that somehow must pay the
salaries of about 100,000 public workers on the PA's

Sharon repeated his opposition to collective
punishment, but demanded that the Palestinians end the
terrorism and gunfire. Larsen said that Arafat "has
lost control," to which Sharon replied, "If Arafat has
lost control, then it is even more important that he
act quickly. We do not want anarchy."

"I have decided to work to bring peace, but that
requires that the other side fulfills its
obligations," the prime minister-elect said.
"Confidence-building steps must come from both sides."

Indyk delivered a letter to Sharon from U.S. Secretary
of State Colin Powell expressing America's tradition
of support for Israel's security and the commitment to
maintain the country's qualitative military edge in
the region. The letter also said that the U.S. strives
to continue the peace process in coordination with
Israel as well as to develop a system of strategic

Powell wrote that Washington dispatched messages to
Arab leaders urging them to restrain themselves and to
give Sharon an opportunity to prove his intentions.
The letter also related to the U.S. government's
concerns about the security situation in the region,
especially the spread of non-conventional weapons to
Iran and Iraq.


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