US embassy cable - 05TELAVIV1361

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 001361 
 
SIPDIS 
 
NEA FOR BURNS, SATTERFIELD/DIBBLE, E. 
NSC FOR ABRAMS/DANIN 
 
E.O. 12958: DECL: 03/06/2010 
TAGS: PREL, ECON, PGOV, KWBG, GZ, IS, GAZA DISENGAGEMENT, ISRAELI-PALESTINIAN AFFAIRS 
SUBJECT: DAHLAN PROMISES IMPROVEMENTS, COUNSELS GAZA 
BUSINESSMEN TO "HAVE PATIENCE" 
 
 
Classified By: Pol/C Norm Olsen for reasons 1.4(b) and (d). 
 
This cable has been coordinated with ConGen Jerusalem. 
 
1.  (C)  Summary: Pepsi bottler and leading Gaza businessman, 
Muhammad Yazgi, told Poloff March 3 that Muhammad Dahlan had 
promised Gaza businessmen recently that conditions at Gaza's 
border crossings into Israel would improve in two to three 
weeks, and asked that Yazgi and other businessmen "have 
patience" until then.  Dahlan reportedly also offered to 
replace PA officials if necessary in order to improve the 
climate within the PA for businessmen.  Other Gazans, 
however, are more skeptical of Dahlan, and stress that that 
ending corruption is more important to the Gazan economy than 
GOI improvements in the crossings regime.  Although he 
acknowledged an increase in the number of laborers and 
businessmen allowed to enter Israel in recent weeks, Yazgi 
called the procedures in place for all but senior PA and PLC 
members crossing at Erez "unacceptable."  End Summary. 
 
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Businessmen Register Complaints 
------------------------------- 
 
2.  (C) Leading Gaza businessman Muhammad Yazgi told Poloff 
March 3 that he and a group of fellow businessmen had met 
with Minister of Civil Affairs Muhammad Dahlan several days 
earlier to express their unhappiness at continued delays in 
bringing in material at Karni and restrictions on the 
movement of people that remain in place at the Erez Crossing. 
 The situation, Yazgi said, has returned to what he called 
the status quo, with transport through Karni functioning at 
what he claimed was approximately 2 to 3 percent of capacity, 
and containers stalled on average 20 to 30 days before they 
can enter the Gaza Strip (Note: Israeli private sector 
contacts confirmed the 20 to 30 day wait for goods to enter. 
End Note).  All this equals what Yazgi terms an exorbitant 
additional cost for transporting goods into the Gaza Strip of 
some NIS 15,000 per container. 
 
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Dahlan Counsels Patience 
------------------------ 
 
3.  (C) Dahlan, according to Yazgi, counseled the group to 
"wait a few weeks" for conditions in Gaza to improve. 
Although he did not provide specific details of his 
discussions with the GOI, Dahlan assured the group that they 
would be satisfied with the results of his efforts.  Dahlan 
added, according to Yazgi, that he would not have accepted 
his new position in the PA without assurances from the 
Israelis that he would be able to make significant progress 
on issues connected with the three border crossings at Erez, 
Karni and Rafah, as a condition for his participation. 
(ConGen comment: In a recent meeting, the Consul General 
asked PM Abu Ala'a whether Dahlan would be placed in charge 
of border crossings, noting that there was grumbling in 
certain Palestinian circles that he could misuse his 
authority for personal gain.  Abu Ala'a responded that Dahlan 
would not/not be put in charge of any border crossings.  End 
Comment.) 
 
4.  (C) Yazgi acknowledged the increase in recent weeks of 
the number of permits to enter Israel that are being issued 
to businessmen and workers alike.  (Note: As of March 6, an 
average of approximately 1,000 laborers and over 100 
businessmen are entering Israel daily.  While the numbers are 
only a fraction of pre-Intifada levels, they are up from near 
zero.  End Note) Yazgi maintained, however, that, permits not 
withstanding, the treatment Palestinians undergo in the name 
of security at Erez is "unacceptable."  Other than certain 
members of the PA and PLC, all others wishing to cross into 
Israel at Erez are required to "strip," or bare their bodies 
from waist to knees, in order to prove they are not carrying 
explosives.  Treatment of leading members of the community, 
who are well and favorably known to the IDF from literally 
years of contacts, in the same manner as for laborers is 
humiliating, he said.  Yazgi said Dahlan assured the group 
that a separate lane would again be established for 
businessmen at Erez, but did not provide a timetable for 
doing so, assuring the group again that action on access 
would be forthcoming "in two to three weeks." 
 
--------------------------------- 
Willing to Fix Problems in the PA 
--------------------------------- 
 
5.  (C) Turning the discussion inward, Dahlan reportedly 
asked the group to raise with him any problems they might be 
having with Palestinian officials that he could address, 
offering to "change people," if that should be necessary. 
While some of those present cited corruption as a major 
concern, Yazgi said that he and several others had urged 
Dahlan to focus on obtaining further, unspecified concessions 
from Israel as being key to their future.  "The rest of the 
problems," Yazgi continued, "we can handle ourselves."  Yazgi 
expressed his confidence that Dahlan will be successful in 
his efforts vis-a-vis Israel, adding that Dahlan also claimed 
to be working "24 hours a day" to prevent security incidents 
that might derail his efforts with Israel -- an approach that 
Yazgi applauded.  (Note: Per a decision reached during a 
February 26 Council of Ministers meeting, Dahlan, as Minister 
of Civil Affairs, is empowered to follow issues concerning 
Israel's disengagement from the Gaza Strip and settlements in 
the northern West Bank, not security or PA personnel matters. 
 End note.) 
 
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Optimism Tempered by Skepticism 
------------------------------- 
6.  (C) Prominent Gazan engineer and recently-resigned 
Palestinian Investment Fund (PIF) board member Jawdat 
al-Khoudry said he does not share Yazgi's confidence in 
Dahlan, claiming that Dahlan lacks "the support of the Gazan 
people," and has chosen "notoriously corrupt" individuals for 
his team, including PIF board member Mohammed Rashid.  In 
Khoudry's view, an end to PA, PLC, and PIF corruption is even 
more important to the Gazan economy than GOI improvements in 
the crossings regime.  Other embassy contacts called Dahlan's 
meetings with businessmen "propaganda," opining that they 
expected little more than talk in the short term on border 
regimes.  Further fueling such skepticism, Israeli media 
reported March 7 that Industry and Trade Minister Ehud Olmert 
has blocked the issuance of over 4,000 of the 17,600 
Palestinian work permits that Defense Minister Shaul Mofaz 
promised the PA following the February Sharm el-Sheikh 
summit. 
 
 
 
 
 
 
 
 
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