Cablegate: Local Development Fund Convenes; Supports

VZCZCXRO5501
OO RUEHROV
DE RUEHJM #1576 2110709
ZNR UUUUU ZZH
O 300709Z JUL 07
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8524
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS JERUSALEM 001576

SIPDIS

SENSITIVE
SIPDIS

NEA FOR FRONT OFFICE; NEA/IPA FOR
WILLIAMS/SHAMPAINE/STEINGER; PRM FOR PDAS GREENE AND
PRM/ANE; NSC FOR ABRAMS/WATERS; TREASURY FOR
SZUBIN/LOEFFLER/NUGENT/HIRSON; BRUSSELS FOR LERNER; PLEASE
PASS TO USAID FOR KUNDER/MCCLOUD/BORODIN

E.O. 12958: N/A
TAGS: EAID ECON EFIN PREL PROV KWBG
SUBJECT: LOCAL DEVELOPMENT FUND CONVENES; SUPPORTS
SEPTEMBER AHLC MEETING

REF: JERUSALEM 1519

1. (SBU) Summary. The Local Development Forum (LDF) met
July 24 for the first time since December 2005. Prime
Minister Salam Fayyad stressed the urgent need for donor
assistance and called for an Ad Hoc Liaison Committee (AHLC)
meeting in September, followed by a donors' conference before
the end of the year. He called on donors not to confer
"legitimacy" on the Hamas take-over of Gaza. The Consul
General reiterated USG support for the PA and expressed
support for an AHLC meeting this fall. While agreeing that
the AHLC should convene soon, the EU was less clear on the
timing and venue. Norway reiterated its view that the AHLC
should be occur on the margins of the UNGA and be held at the
ministerial level. End summary.

2. (SBU) The Local Development Forum (LDF), which serves as a
forum for regular coordination at the local level for donor
and aid agencies, convened July 24 in Ramallah. This was the
first meeting of its kind since the LDF replaced its
predecessor, the Local Aid Coordination Committee, in
December 2005. Chaired jointly by the Palestinian
Authority's Ministry of Planning, Norway, the World Bank and
UNSCO, and co-sponsored by the EU and USG, the LDF and its
strategy groups became ineffective after March 2006 when the
formation of a Hamas-led government prompted many donors to
avoid working directly with the PA.

3. (SBU) In a demonstration of both donor community-PA
re-engagement as well as a reinvigorated aid coordination
process, Prime Minister Salam Fayyad opened the July 24 LDF
meeting. Emphasizing the unity of the West Bank and Gaza and
the need to address the humanitarian situation in Gaza,
Fayyad said that the PA and the donor community "should
proceed in a manner that does not confer any legitimacy" on
the Hamas leadership in Gaza and "does not undermine the PA."
He said the PA is "fully engaged" in improving the lives of
the Palestinian people. He urged that, in the months ahead,
donors consider a more comprehensive approach in formulating
assistance plans. Fayyad stated that sustainable development
and the realization of normal economic life are more likely
to be realized from the efforts of private enterprise than
from donor programs.

4. (SBU) Fayyad declared his support for Norway's proposal
that an Ad Hoc Liaison Committee (AHLC) meeting to be held in
September. He stated that the AHLC meeting should "take
stock" and "lay out what is expected in a clear and precise
manner." He said he hoped the meeting would "send a strong
signal of support for what we're trying to do here under
difficult circumstances." Fayyad recommended that a broader
donors' conference be held before the end of the year to
follow-up on the AHLC meeting.

5. (SBU) In opening remarks after Fayyad, the Consul General
stated that the USG supports Fayyad's position on an AHLC
meeting and a follow-on donors' conference. He noted that
President Bush made clear in his July 16 speech that the USG
is strengthening its financial commitment to the Palestinian
people and the government led by President Abu Mazen and
Prime Minister Fayyad. EU and EC representatives voiced
their support for holding an AHLC meeting soon. The EC also
announced an additional EURO 90 million in assistance,
bringing the total to over USD 1.1 billion in 2007. LDF
Joint Chair Norway's Representative asserted that, based on
consultations in recent days, consensus had been established
on the need for an AHLC soon, and Oslo continues to propose
that it be held at the Ministerial level on the margins of
the UNGA.

WALLES

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