FOR IMMEDIATE RELEASE FEBRUARY 12, 2004
CONTACT: 972-(0)8-973-3336
SHURAT HADIN: UNRELEASED REPORT ACKNOWLEDGES THAT ARAFAT DIVERTED EUROPEAN
FUNDS FOR TERROR OPERATIONS

An, as of yet, unreleased report prepared by the European Commission's
Anti-Fraud Office (OLAF) has concluded that tens of millions of dollars in
humanitarian aid, donated by the European Union (EU) to the Palestinian
Authority (PA) has been utilized for terrorist operations against Israel.

Earlier this week, the German daily newspaper "Die Welt" reported that OLAF
had finally confirmed Israeli allegations that Palestinian leader Yasser
Arafat had diverted millions of dollars in EU funding to the Fatah Tanzim
and Hamas terrorist organizations. The OLAF findings are based upon
documents recovered from the PA headquarters by Israeli military forces
during the course of Operation Defensive Shield. OLAF agents recently
visited Jerusalem to be briefed by Israeli security officials and to
ascertain the authenticity of the documents.

The OLAF investigators have accepted that the captured documents are genuine
and evidence Arafat's wide-spread diversion of the EU's humanitarian aid to
Palestinian terrorist operations which targeted Israeli civilians.

The Israeli documents had been presented to the EU's Commissioner for
External Affairs Chris Patten last year. Patten, however, refused to
recognize their authenticity and denied they established that Arafat was
using EU funds for terror attacks. Under increasing pressure from European
parliament members, Patten was forced to order an OLAF investigation into
the Israeli allegations.

The documents include letters signed by Arafat ordering payments to eleven
terrorist leaders for guerilla operations. In addition, there are receipts
for the payments of the mortgages of the families of Hamas suicide bombers,
as well as a cash awards of several thousand dollars to the family
members. Other documents detail how European funds were used by the PA's
Preventative Security Forces to stage "spontaneous" demonstrations in
support of imprisoned Fatah Tanzim Marwan Barghouti, who was placed on
trial in Israel for masterminding terror attacks that killed 26 Israelis.

In May 2002, Shurat HaDin - Israel Law Center filed a N.I.S. 100,000,000
civil action against the EU on behalf of a family of terror victims in the
Tel Aviv District Court. The law suit arises from a August 5, 2001,
Palestinian terror attack which left the mother of the British born family,
Techiya Blumberg, dead and her husband Steven, and young daughter, Tziporah,
seriously injured. The Blumbergs were traveling in their car near Kalkliya
when Palestinian police officers, members of the Fatah Tanzim, opened fire
from another vehicle. Techiya Blumberg, 35, was the mother of five children
and five months pregnant at the time of her murder.

The Blumberg law suit, which is brought by attorney Nitsana Darshan-Leitner,
alleges that the EU recklessly provided the PA with massive sums of
financial aid, while knowing that the money was being diverted from its
intended civilian purposes to Palestinian terrorist groups. The court
papers assert that the EU was repeatedly warned by Israel that its aid was
financing Palestinian attacks on Israelis.

Following the signing of the Oslo Accords, the EU pledged to provide funding
to the PA for civilian projects, primarily to pay the salaries of the PA's
municipal workers. The EU donates approximately $10 million a month and more
than $1.5 billion to the PA since 1994. The plaintiffs allege that the EU
failed to undertake any steps to monitor or scrutinize how the PA was
utilizing the donated money.

"The OLAF report should be immediately released to the public and the EU's
aid to the PA suspended for good," said Shurat HaDin Director
Darshan-Leitner, "Without the EU's reckless provision of financing to the
Palestinians, hundreds of Israeli terror victims would still be alive and
thousands of others would never have had to suffer their tragic injuries.
The European taxpayers must now acknowledge that they are the ones who have
been financing the Palestinian terror attacks and accept that they must pay
compensation to the families of the victims."

In a press release issued this week in response to the "Die Welt" news
story, OLAF insisted that it had not completed its investigation yet. It
also complained that information discussed in the newspaper was based upon
confidential,"in camera" briefings which had been now leaked.

OLAF, however, did not deny the accuracy of the news report.

FOR MORE INFORMATION: info@israellawcenter.org
(Israel) 972-(0)8-973-3336, (US) 212-591-0073
____________________________________________________
Shurat HaDin - Israel Law Center is a long overdue Jewish legal rights
institute based in Israel. Staffed by some of the country's leading activist
attorneys, we are dedicated to providing legal representation and resources
for the numerous courtroom struggles, which are being waged in the Israeli,
American and European courts on behalf of the Jewish State. We serve as a
central clearinghouse and litigation base for the multifarious legal battles
that have been thrust upon Israel's citizens during these dark days. Shurat
HaDin is a non-political and independent body which is not affiliated with
any branch or agency of the Israeli government nor any political party.