GAZA page 67

to be a Palestinian agency for
processing contributions under
its own control. Otherwise, Mr.
Arafat has argued, his adminis-
tration — which already is lim-
ited by Israel's prerogative to
decide who enters and leaves its
territory — would be little more
than a puppet of the donor states
when it came to the key issue of
local development.
For months the two sides held
firm to their positions while the
economic and psychological situ-
ation in Gaza deteriorated. Last
week, however, during their vis-
it to Gaza on the first anniversary
of initialing the Oslo accord, a
compromise was reached through
the auspices of Norwegian For-
eign Minister Bjorn Godal and
U.N. special emissary Terjez
Larsen (one of the Norwegian fa-
cilitators of the secret talks that
led to the Declaration of Princi-
ples). It provides for a multi-track
mechanism that will enable the
donor states to send funds
through the U.N. Development
Program specifically for the
Palestinian Police or transfer
funds for development projects
through the United Nations and
the World Bank-PECDAR con-
nection. Under these arrange-
ments, the Palestinians will enjoy
greater decision-making powers
than the World Bank conception
had originally allowed. Mr.
Larsen (who will be opening a
special office in Gaza to preside
over the U.N. role), must bring
this compromise before a special
meeting of the World Bank and
donor countries in Paris.
The irony of the situation is
that while economic progress has
generally been seen as the key to
the success of the Declaration of
Principles, and Mr. Arafat's frus-
tration has been with the World
Bank, in venting it he has turned
on the closest and most conve-
nient target: Israel. And Israel,
it must be said, has responded in
kind, creating a round of mutual
recriminations. During a meet-
ing with Prime Minister Yitzhak
Rabin at the height of the Israeli-
Jordanian romance, Mr. Arafat
read out a litany of Israeli viola-
tions of the Gaza-Jericho agree-
ment (mostly in the form of
foot-dragging), while Rabin coun-
tered with charges that the PNA
was ducking its obligation to
bring Palestinian terrorism to a
halt. ("All that was lacking was
for the two leaders to spit at each
other," defense analyst Ze'ev
Schiff wrote in Ha'aretz, Israel's
most respected newspaper.)
At a meeting last week with Is-
raeli Foreign Minister Shimon
Peres (the first Israeli minister to
pay a "state visit" to autonomous
Gaza), the two leaders tried to
take a more conciliatory stance.
But on this first anniversary of the
Declaration of Principles, they
could not paper over the fact that
progress on the agreement has
been agonizingly slow. U

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