... of course we do appreciate General Dayton's work to build capacity over
there. But of course much more, a lot more, substantially a lot more can be
done by the Palestinians to dismantle the infrastructure - that is to
collect illegal arms, to disband and outlaw all the terror organizations.
Nothing has been done in this area, not to mention of course, the
incitement, the curriculum and all that. These things are still standing.
These are not just demands and expectations that we have. I mean these are
commitments that the Palestinians have taken upon themselves.

Transcript of briefing by Deputy Foreign Minister Ayalon:
Mr. Daniel Ayalon Deputy Minister of Foreign Affairs
Israel Ministry of Foreign Affairs 8 Jul 2009
www.mfa.gov.il/MFA/About+the+Ministry/Deputy_Foreign_Minister/Speeches/Dep-FM-Ayalon-on-measures-to-ease-restrictions-on-the-Palestinian-population-08-Jul-2009.htm

Thank you.

Good afternoon and welcome to the Foreign Ministry here in Jerusalem.

First, let me say that since the new government of Israel started its tenure
three months ago, we have been waiting for the response of the Palestinians
to our call to sit with us directly, and without any preconditions. This
call has been made publically, and has been forwarded to the Palestinians -
And it was made in a very, very concrete way by both Prime Minister
Netanyahu and Foreign Minister Avigdor Liberman.

Unfortunately, so far, we have not received any response from the
Palestinians, and we would like them to move forward, irrespective of
outstanding issues. We would like to sit with them in order to solve many
of the issues. And again, irrespective of that, we are moving forward on the
other two tracks that Israel believes are major pillars to establish
peaceful coexistence and, hopefully, peaceful relations and a treaty with
the Palestinians.

Besides the political pillar, which of course is very important to us, there
are two others: Capacity building, which is taking place - and of course, we
support and applaud the good work of General Dayton, the Europeans, and
anyone who can help build the Palestinians' capacity to govern themselves in
a responsible way, to do away with terror, and to create another entity. If
we do want to create another entity here, an independent, sovereign one, the
last thing we need is a terror state or a failed state. So this capacity
building is continuing with the help and facilitation of the Israeli
government.

And then, there is the third pillar, or the third area, which is the
economic one.

This government also believes that, with all due respect to conferences, to
press events and to high level dialogs, if people on the ground do not feel
the change in their lives, whether it is economic, whether it is social,
whether it is cultural, and security of course, on the Israeli part, then
all these talks are not worth very much. So, in order, also, to have a
bottom - up approach and to really change the situation on the ground,
Israel has taken major steps to help spur Palestinian West Bank economy.
And, despite, I emphasize, despite the risk involved to the Israelis, we are
taking this risk in order to really have a major change on the ground.
And, indeed, in the last two years, but basically the last three months, we
have removed two thirds of the check points - two thirds of the check
points: out of the forty one, only fourteen remain in operation. All of them
are now working on a normally open basis; that is they are open twenty four
hours in order to allow much more efficiency.

This is not just a quantitative improvement but also a qualitative one by
which all check points surrounding major cities in the West Bank are now
removed. If to this we add the Prime Minister's approval from this morning,
to extend the international crossings for Palestinian goods to twenty four
hours, we begin to see a critical mass which we believe has and will
continue to make a marked improvement in the Palestinian economy.

We also have doubled or allowed the doubling of traffic movement in Shaar
Ephraim, and over the last year the track load transfers went from one
hundred and ten to two twenty. It just doubled on a daily basis. And we have
also made a major change in terms of permits to Palestinian businessmen:
many thousands of them can come, and numerous overnight permits as well.

I would say that the aggregate impact of all these steps, as we can see
right now, already has some effect on the ground - real improvements. The
growth that we see in the Palestinian economy in 2008, just over last year,
according to the World Bank, is eight per cent and according to the forecast
of the World Bank we have eight per cent for the next two years' growth for
the Palestinians. We see decreasing unemployment in the West Bank. We see a
seven per cent real increase in tax revenue for the Palestinian Authority in
the West Bank. We see a twenty per cent increase in V.A.T. revenue, out of
which, and this is very significant, out of which forty five per cent just
in the last quarter. So that, in the first quarter of '09, this last
quarter, the V.A.T. collection of the Palestinian Authority went up by forty
five per cent over the first quarter of last year.

We see a tripling of the number of tourists to the West Bank - one point two
million this year. Seventy five per cent hotel capacity. We see that West
Bank imports doubled in the last year. We see a fourteen per cent increase
in private bank deposits, a twenty four per cent increase in Palestinian
workers in Israel; now seventy five thousand of them work in Israel. And we
see also a construction boom - people tell me that the new mall in Jenin is
a very modern, great one, and Ramallah and Hebron are also cities that are
enjoyable to visit.

We also take note with satisfaction that both the Quartet as well as the
United States welcome these steps and, as I mentioned, the impact of this
critical mass being amassed and directed to the West Bank has already made a
major change for Palestinian lives in the West Bank, and we believe that
this will continue.

We also want to help the Palestinians with long term projects, and today,
the special ministerial committee headed by Prime Minister Netanyahu met to
discuss specific projects to work on and to really expedite anything we can
from our side. As far I can tell, any bureaucratic or other blocks are not
coming from us, but from the Palestinian Authority. So we call upon them,
irrespective of political differences, to come and meet and sit and work, on
the ground as well as on the political level.

Also, I would like to reiterate the call of the United States to the Arab
countries, to contribute their share as well. They keep talking about their
interest in bringing about a settlement here, peace here - to solve the
conflict. They can do a lot by investing in the West Bank in a major, major
way.

And there is no longer the pretext of not having a conducive environment
for investments. What I have detailed now, and you will hear in a far more
detailed way about what we have been doing to allow access in movement
notwithstanding the risk, will also allow foreign investments to come in and
create as many jobs as possible for the Palestinians.

Most of the money today - most of the cash today, can be found in the Gulf
countries, in Saudi Arabia, and in relation and in sharp contrast to the
economic situation in Europe, the United States and other places, this money
is available and it is just a matter of political will to do it. So far, we
have not seen a cent being invested there and we call upon the Arab
countries to do it, to put their share. We will continue to help and
facilitate; we want to change the situation continuously, from the bottom up
as well as from the top down.

Thank you very much.

I will stop here and I will let my colleagues provide further details -
unless there are specific questions on policy which you have right now.

QUESTION

Ethan

My question is just off center of the economics, so if you do not want to
answer it, just tell me.

In August, in theory, Fatah is going to hold a General Congress after twenty
years, and one issue is outsiders getting in. I thought of this when you
talked about facilitating foreign investment. Do you know whether the
Government of Israel has made a decision for letting in outside Fatah guys,
who you may not be in love with to start with?

Mr. Daniel Ayalon

We have not gotten any formal request yet but I am sure that, once we get it
from the Palestinian Authority, we will consider it in a more serious way. I
will just tell you off the bat that it is not Israel's interest to block it,
but on the contrary to facilitate it as much as we can, barring of course
any specific security issues. But as a general rule, Israel will help.

Herb

I have a two part question. The first part is: How did the announcements
that you made, how this is connected to the talks that Barak is having with
Mitchell in London, or they had with Mitchell in London? How is this working
towards what they are trying to do?

And the second thing is that you are talking about wanting to see Arab
investment. Number one, why do you think that this is not happening? And,
number two, what would Israel do in order to encourage, for instance, the
Saudis to invest in the West Bank?

Mr. Daniel Ayalon

First of all, regarding your first question, I do not see any relation
whatsoever. Actually we have taken stock of, I would say, all the steps that
have been taken, especially in the last three months. And since it was a
trickle here and there, we thought that it would be very important to put it
in an organized fashion, in a concentrated fashion, so that people will
realize what is available right now; what Israel has been doing and what is
available.

The second reason is to also call upon international investors to put the
money in here, as we have been taking all this risk for access in movement
and we will continue with that. So this is the first question.

The other one - with the Saudis. I would say besides calling and beseeching
and asking, we cannot do much. I think that there is no excuse whatsoever
now, after this historic speech of Prime Minister Netanyahu in Bar-Ilan
three weeks ago. So we understand the political horizon, we understand the
needs of everyone here and indeed I cannot tell you why. I mean, I can maybe
make some surmises why the Gulf countries or the Saudis would not invest but
I would not want to speculate here, at this time.

Thank you very much.

One more question.

Name inaudible [David Bedein]

Is there any understanding, from Israel's point of view, that Abbas has
taken any measures to disarm or to disband the El Aqsa Martyrs Brigade or
any other terrorist groups under him. Or, the last three nights on
Palestinian television they are celebrating Fatah, past Fatah murders of
Israelis, any commitment in Israel over the frequencies of Palestinian
television..

Mr. Daniel Ayalon

No, we are still expecting to see a real move over there, and as I
mentioned, of course we do appreciate General Dayton's work to build
capacity over there. But of course much more, a lot more, substantially a
lot more can be done by the Palestinians to dismantle the infrastructure -
that is to collect illegal arms, to disband and outlaw all the terror
organizations. Nothing has been done in this area, not to mention of course,
the incitement, the curriculum and all that. These things are still
standing. These are not just demands and expectations that we have. I mean
these are commitments that the Palestinians have taken upon themselves.

Everybody talks now about the Israeli obligations and commitments. Yes, we
are not shying away from this but we say - do not make this commitment, or
wait for a hundred per cent fulfillment. This is why we say - you have
issues, we have issues; Let us sit and talk. And, of course, our first
demand is the security demand that the Palestinians have not done so. But
unlike, unfortunately, the Palestinians who come and try to discomfit, who
try to condemn, who try to really attack Israel in any international forum,
we are not doing that - Because we really want to sit seriously with the
Palestinians, and to discuss everything, hopefully in good faith, and with
a true commitment to peaceful coexistence. I wish that Abu Mazen, the
government there, and Fayyad would really take our government's attitude,
our government's conduct, very seriously - what we have done already and our
willingness for the future as well.

Inaudible name

According to the reports of the UN NGO it would seem that one of the biggest
hindrances to the economic development and movement is the security barrier.
Is Israel going to make any changes vis-a-vis the security barrier, and l...

Mr. Daniel Ayalon.

Yes. First of all, I beg to differ. I beg to differ because I have cited to
you and you will hear in further detail concrete data which attests to the
fact that the security fence has no impact on economic activities and there
are many, many ways actually, to kind of circumvent that, and we have it
here. Certainly the security fence has not been in the way of the one point
two million tourists that visited. And I can tell you that three more can
come if we have more facilities, more hotels and more investment over there.
So, that does not coincide with the facts.

Thank you.