US embassy cable - 05TELAVIV1064

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 001064 
 
SIPDIS 
 
E.O. 12958: DECL: 02/20/2014 
TAGS: EFIN, ECON, EAID, KWBG, IS, GAZA DISENGAGEMENT, ISRAELI-PALESTINIAN AFFAIRS, SETTLEMENTS 
SUBJECT: GAZANS TORN OVER DUBAI INVESTOR'S PROPOSED 
PURCHASE OF SETTLER HOMES 
 
 
Classified By: Economic Counselor Bill Weinstein for reasons 1.4 (b) an 
d (d) 
 
1.  Israeli media reported that Dubai businessman Mohammed 
Alabbar recently visited Israel and the Palestinian 
territories with an offer to purchase settler homes intact, 
saving the GOI the need to demolish them.  Previously, NSC 
advisor Gabi Blum told EconCouns that Alabbar's visit had 
been sponored by the GOI and had included a "brave" trip into 
Gush Katif to speak with settlers.  Einat Wilf, assistant to 
Deputy PM Shimon Peres, confirmed that while there is 
widespread support for Alabbar's proposal within PM Sharon's 
cabinet, adopting it would require the GOI to rescind its 
official decision to demolish settler homes.  In addition, 
she said, such a change would only be made in close 
coordination with the PA, via working-level negotiation 
groups to be established this week.  Palestinian private 
sector contacts are ambivalent about the prospect of Gulf 
State investment in settlement asset development.  Some 
believe that foreign ownership of building contracts is 
irrelevant as long as Gazan inputs and labor are utilized, 
while others argue that only Gazan businesspeople have the 
understanding to properly dispose of the settlement assets. 
More broadly, Gazan contacts were pessimistic about direct 
GOI-PA negotiations on the economic aspects of disengagement, 
noting that the private sector has been ignored by the PA. 
 
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Dubai Construction Mogul Hopes to Buy Settler Homes 
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2.  (SBU) Israeli print media and radio reported February 18 
that Mohammed Alabbar, chairman of Dubai's Imr construction 
company, recently visited Israel and the Palestinian 
Territories with an offer to purchase settler homes in the 
Gaza Strip in tandem with Israel's planned pullout.  Alabbar 
would pay "tens of millions" of dollars for the houses, 
ostensibly saving the GOI the need to demolish them during 
evacuation.  In exchange, Alabbar's firm has reportedly 
requested exclusive building contracts for the settlements. 
EconCouns had received news of this visit previously from NSC 
advisor Gabi Blum, who confirmed that the GOI had sponsored 
the visit.  In a visit to the Gaza Strip, Blum said, Alabbar 
had visited Gush Katif settlements and "bravely" spoke with 
settlers about his proposal. 
 
3.  (C) Einat Wilf, assistant to Deputy Prime Minister Shimon 
Peres, told Econoff February 18 that there is widespread 
support for Alabbar's proposal within PM Sharon's cabinet, 
but that the GOI still officially intends to destroy settler 
homes and remove rubble prior to withdrawal.  (Note: Some 
contacts state that the GOI decision to destroy homes is 
political symbolism -- a "severing of ties" with the Gaza 
Strip.  The GOI has acknowledged on numerous occasions, 
however, that demolition and removal of rubble would be 
expensive and time-consuming.  End note.)  Wilf emphasized 
that any change in the government's decision to destroy 
settler homes would be made in close coordination with the 
PA, via new working-level GOI-PA negotiation teams. 
 
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Settler Homes Won't Suit Gazans -- Construction Needed 
--------------------------------------------- --------- 
 
4.  (C) Private sector contacts unanimously reinforced the 
view that settler homes are not appropriate for Palestinian 
families and will do nothing to alleviate Gaza's housing 
shortage.  They also emphasized that the construction 
industry can potentially be Gaza's fastest-growing sector 
post-disengagement, and that development of settlement assets 
post-withdrawal is therefore imperative.  PalTrade 
agribusiness project officer Hashim Al-Hussaini told Econoff 
he is not opposed to foreign ownership of settlement assets 
as long as the investor understands he must tear down the 
settlement houses and use exclusively Gazan inputs and labor 
to build replacement housing.  Dr. Hani Shawa of the Bank of 
Palestine noted that construction can, in principle, 
revitalize every major sector of the Gazan economy, including 
furniture, cement, aluminum, glass, and metals, and can 
provide immediate work for hundreds of thousands of laborers. 
 
 
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Gazan Private Sector Doubts PA is Listening 
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5.  (C) Jawdat Al Khoudry, engineer and board member of the 
Palestinian Investment Fund, told Econoff that Alabbar 
"doesn't know what Gaza needs -- if he understood the 
situation, he would stop his bid" to purchase settler homes 
intact.  Khoudry said he is unimpressed by Alabbar's reported 
discussions with Abu Mazen -- in his view the PA does not 
understand what is economically good for Gaza either.  He and 
other contacts are pessimistic about the effectiveness of the 
working-level GOI-PA negotiation groups currently being 
established.  Nobody is talking to the private sector, 
contacts say, although it is the private sector alone that 
understands how to boost the Gazan economy 
post-disengagement.  While he was quick to explain that many 
Gazan businesspeople are preparing for disengagement -- 
including arranging a potential conference of third party and 
NGO investors to take place in Cairo in late March -- he 
expressed frustration that "economic planning for 
disengagement is being done in Ramallah." 
 
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