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U.S. Middle East Policy

Restrictions Imposed On Aid to Palestinians

Bill Avoids Directing Funds to Authority

By Glenn Kessler
Washington Post
May 5, 2005

Congress imposed the tight restrictions on aid to the Palestinians that President Bush had announced with fanfare in his State of the Union address, possibly dealing a blow to U.S. efforts to support new Palestinian President Mahmoud Abbas.

In the emergency spending bill that lawmakers completed late Tuesday, the White House had sought $200 million “to support Palestinian political, economic, and security reforms,” as the president said in his February State of the Union address. But the fine print of the document gives $50 million of that money directly to Israel to build terminals for people and goods at checkpoints surrounding Palestinian areas. Another $2 million for Palestinian health care will be provided to Hadassah, the Women’s Zionist Organization of America, while the allocation of the rest of the money is tightly prescribed.

The bill appears to make it difficult for the White House to give any of the aid directly to the Palestinian Authority, as Palestinians had hoped. Instead, the assistance must be funneled through nongovernmental organizations.

While in theory the White House could seek some sort of waiver on the restrictions to direct aid, a congressional official said the State Department had assured lawmakers that Bush would not seek that authority.

“The conferees agree that the budget request and the recommendation contained in this Act do not provide specific direct financial support for the Palestinian Authority,” the conference report said. The bill requires that $5 million of the aid be used for an independent examination of the authority’s accounting procedures and expenditures.

Direct aid to the Palestinian Authority is symbolically important for Abbas, who is also known as Abu Mazen. Shortly after Palestinian leader Yasser Arafat died in November, Bush allowed $20 million to be delivered directly to the Palestinian Authority. Under an agreement with Congress, however, that money was immediately transferred to pay bills owed to Israel’s electric company.

Edward G. Abington Jr., a consultant to the Palestinian Authority, said the congressional action is a “huge slap in the face to Abu Mazen,” whose party faces a strong challenge in the upcoming municipal elections. He said it was a “pretty startling setback” for Abbas because Abington believes the aid restrictions are now more stringent than when Arafat was alive.

“The Palestinians will not see this money for months and months,” Abington said.

Israeli officials have complained that Abbas has avoided making hard choices since his election in January. Israeli Ambassador Danny Ayalon said yesterday that Abbas had been “very disappointing” because he has not confronted the militant groups and has not acted to coordinate with the Israelis on a planned withdrawal from settlements in the Gaza Strip.

The White House had indicated that as much as $50 million in aid could be used to help ease the bottlenecks at Israeli checkpoints. Abington said the Palestinians had been led to believe that they would receive the money to buy U.S. equipment.

But Ayalon said Israel had allocated $200 million to build high-tech terminals and had sought the money to help expedite their construction. Israel receives nearly $3 billion in military and economic aid from the United States. The Palestinians “have a lot to prove that they can really work in a transparent way” with aid, Ayalon said.

Danielle Pletka, a vice president of the American Enterprise Institute, had testified before Congress that the Palestinians were not ready to absorb a huge infusion of aid. While it would be nice to give diplomatic support to Abbas, she said yesterday, Congress has a “fiduciary obligation not to throw money down a toilet.”

Abington noted that the finances of the Palestinian Authority are managed by Salaam Fayad, a former International Monetary Fund official who has won praise from U.S. officials for instituting transparency and the independent auditing of Palestinian accounts.

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Additional Resources

Magazine – Washington Report on Middle East Affairs

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more resources

Congressional Research Service:
U.S. Aid to Israel

Congressional Research Service:
U.S. Aid to the Palestinians

Book – Fallen Pillars: US Policy towards Palestine and Israel since 1945

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Arms Transfers to Israel: 1993 to Present

U.S. Agency for International Development (USAID)

Jewish Virtual Library on US Aid


Council for the National Interest

US Campaign to End the Israeli Occupation

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