Order Code IB92052
CRS Issue Brief for Congress
Received through the CRS Web
Palestinians and Middle East Peace:
Issues for the United States
Updated May 24, 2001
Clyde Mark
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
The United States and the Palestinians
U.S. Policy Toward the Palestinians
U.S. Aid for the Palestinians
Wye Agreement Funding
Congress and the PLO
Palestinian Statehood
Current Negotiations Between Israel
and the Palestinians
Unresolved Issues in the Palestine Problem
Jerusalem
Boundaries
Israeli Withdrawal from Occupied Territories
Israeli Settlements in the Occupied Territories
Compensation/Repatriation for Palestinian Refugees
Demilitarized Zones and Peacekeeping Forces
Palestinians and the Peace Process
The Palestine Liberation Organization and
Palestinian Representation
Opposition
The Palestinian Entity
Government
Police
Economy
Other Aspects of the Palestinians
Terrorism
Intifadah, 1987
Palestine Refugees

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Palestinians and Middle East Peace: Issues for the United States
SUMMARY
The United States began contacts with
ing, population exchanges, economic coopera-
the Palestine Liberation Organization (PLO) in
tion, diplomatic relations, and the status of
December 1988, after the PLO accepted
Jerusalem. Then on August 19, 1993, Israeli
Israel’s right to exist, accepted U.N. Resolu-
and PLO representatives initialed a secretly
tions 242 and 338 that call for an exchange of
arranged Declaration of Principles to guide
land for peace, and renounced terrorism. The
future negotiations. On September 10, the
United States continues its contacts with the
PLO and Israel exchanged letters of mutual
PLO and the Palestinian Authority elected in
recognition, and on September 13, the two
January 1996, and is an active broker in the
signed the Declaration of Principles, that called
continuing Middle East peace process.
for Israeli withdrawal from Gaza and Jericho,
the election of a Palestinian Council, and
Congress gave the President the authority
negotiations for future withdrawals and a
to waive previously passed legislation prohibit-
permanent settlement in 5 years.
ing U.S. contributions to the United Nations
from funding any PLO activities, threatening
On May 4, 1994, Israel and the PLO
to withdraw U.S. membership from interna-
signed an agreement providing for the Israeli
tional organizations that recognize the PLO,
withdrawal from Gaza and Jericho (withdrawal
prohibiting U.S. government employees from
completed May 11, 1994). The Interim Agree-
negotiating with the PLO, and labeling the
ment signed on September 28, 1995 (also
PLO a terrorist organization. The waiver
called Oslo II or the Taba Agreement), pro-
authority was extended in P.L. 104-107 (Feb-
vided for elections for the 88-seat Palestinian
ruary 12, 1996), but expired August 12, 1997.
Assembly, the release of Israeli-held prisoners,
Congress also ordered closed PLO offices in
Israeli withdrawal from six West Bank cities,
Washington and New York, although the New
and other issues. The Israelis withdrew from
York office serving the U.N. remains open
the West Bank cities by the end of 1995, and
under a U.S. court decision.
the Palestinian Assembly was elected on Janu-
ary 20, 1996, and sworn in on March 7, 1996.
In opening remarks to the Madrid confer-
ence on October 30, 1991, the Palestinian
The peace talks stalled after Israel elected
delegation accepted transitional phases for the
Binyamin Netanyahu Prime Minister in May
peace process and accepted confederation of a
1996. Israel and the Palestinians agreed to an
Palestinian state with Jordan. Despite accept-
Israeli withdrawal from Hebron in January
ing confederation, most Palestinians want an
1997, and on October 23, 1998 signed the
independent Palestinian state.
Wye agreement to meet previous commit-
ments. Israel suspended implementation of the
The Israeli and Palestinian delegations did
Wye agreement in mid-December 1998 be-
not appear to be making any progress in re-
cause of the Israeli elections, scheduled for
solving any of the issues: elections for an
May 1999, and because Israel claimed the
interim Palestinian administration, the future
Palestinians were not meeting their commit-
national status of the West Bank and Gaza
ments. Also see CRS Issue Brief IB91137,
Strip, borders, peacekeeping forces, demilita-
The Middle East Peace Talks.
rized zones, water and natural resource shar-
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
President Bush telephoned Palestine President Arafat and Israeli Prime Minister
Sharon on May 23 to urge them to accept the Mitchell Commission recommendations to call
a cease-fire, stop settlements, arrest terrorists, release prisoners, and take other steps toward
a resumption of negotiations. Sharon called for a Palestinian cease-fire and rejected a
settlement freeze. The Palestinians rejected the cease-fire unless Israel agreed first and
implemented a settlement freeze. The Mitchell Commission released its report on May 21,
and called for a cease-fire, confidence building measures, and a resumption of the peace
negotiations.
The death toll rose to 443 Palestinians since the beginning of the uprising on September
29, 2000. Israel lost 87 Jewish and 13 Arab Israelis as of May 23, 2001. The 13 Israeli
Arabs were killed by Israeli police during October demonstrations inside Israel.
BACKGROUND AND ANALYSIS
The United States and the Palestinians
U.S. Policy Toward the Palestinians
Between World War II and the 1991 collapse of the Soviet Union, U.S. policy toward
the Middle East was based on several broad goals, the most noteworthy of which were (1)
stop Soviet expansion into the region; (2) keep open the Middle Eastern lines of
communication and trade; (3) maintain Western access to Middle Eastern oil; (4) foster
democracy and free market economies; and (5) protect Israel’s security.
There appear to be many reasons why U.S. citizens have favored Israel: Israel and the
United States espouse shared Judeo-Christian principles; both countries were “pioneering”
in their early years; both countries are democracies; the United States has empathy for Israel’s
position as an embattled “underdog”; Israel and the United States opposed Soviet expansion
during the cold war years; the United States has sympathy for the experience of European
Jews in World War II; Jewish-Americans have a very effective pro-Israel political support
organization; and the United States is more aware of Israel’s point of view. In short, Israelis
“are like us.” Conversely, there is less empathy among Americans for Arab viewpoints
because Arabs are “not like us.” Eastern Arab culture (dress, food, music, art, written and
spoken language, religion) appears to have little in common with Western American culture,
and Arab-Americans in the past have tended to assimilate more than some other ethnic groups
and to avoid the public stage of advocacy for Arab causes.
The United States, until recently, treated the Palestinians as one of the problems to be
solved in ending the Arab-Israeli dispute rather than as participants in the peace process.
From 1948 until the 1967 war, the United States, like many other countries, considered the
Palestinian people in the context of the refugee problem and not as an independent national
movement. Beginning with a series of terrorist incidents starting in 1968, most added
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“terrorist” to the “refugee” image of Palestinians. President Carter shifted the
terrorist-refugee perception on March 16, 1977, when he said the Palestinians deserved a
homeland, and on January 4, 1978, when he said that the Palestinians had legitimate rights and
should participate in any deliberations about their future. The Camp David agreements of
September 1978 mentioned “the legitimate rights of the Palestinian people.” Early in the
Reagan Administration, officials returned to referring to Palestinians as “refugees” and
“terrorists” and did not mention Palestinian rights or self-determination. But in his September
1, 1982, Middle East address, President Reagan said that the Palestinian problem was more
than refugees.
The United States changed its policy toward the PLO in 1988. In 1975, one year after
the Arab League stated that the Palestine Liberation Organization (PLO) was the sole
representative of the Palestinian people, Secretary of State Henry Kissinger informed Israel
that the United States would not recognize or negotiate with the PLO unless and until the
PLO recognized Israel and accepted U.N. Resolutions 242 and 338. Congress codified the
pledge into law (Section 535, P.L. 98-473, October 12, 1984), and added that the PLO also
must renounce terrorism. PLO chairman Yasir Arafat told the U.N. General Assembly
meeting in Geneva (because the United States would not grant Arafat a visa to attend the
U.N. session in New York) that the PLO recognized Israel, accepted U.N. Resolutions 242
and 338, and renounced terrorism. Secretary of State George Shultz stated on December 14,
1988, that the PLO had met the conditions stipulated by the United States, and that the
United States would open a dialogue with the PLO in Tunis, Tunisia, on December 16, 1988.
It was not made public why the Reagan Administration, considered by most to be pro-Israeli,
chose to open the dialogue with the PLO at that time. Some speculate that President-elect
George Bush asked President Reagan for the gesture as part of a Bush plan to address the
Arab-Israeli issue.
The United States maintained the dialogue with the PLO in Tunis until June 20, 1990,
when President Bush ended the talks because the PLO did not denounce an attempted
terrorist attack near Tel Aviv on May 30, 1990. President Bush announced on March 6, 1991
(in the wake of the Gulf war), that he would pursue Arab-Israeli peace negotiations; he
dispatched Secretary of State Baker to the Middle East where he met with Palestinian leaders
from the occupied territories. Baker’s 8 trips to the region and his contacts with the
Palestinians, Jordanians, Israelis, Syrians, Egyptians, and others led to peace talks in Madrid
on October 30, 1991. But at Madrid and the subsequent meetings, the United States (and
Israel) treated the Palestinians as part of the Jordanian delegation, not as a separate entity.
On September 10, 1993, following the Israeli-PLO mutual recognition, President Clinton
announced that the United States would resume the dialogue with the PLO. PLO leader
Yasir Arafat, representing the national aspirations of the Palestinian people, shared the
spotlight with Israeli Prime Minister Rabin and President Clinton at the signing of the
Declaration of Principles on the White House lawn on September 13, 1993. U.S. official
attitudes toward the Palestinians had evolved from seeing them only as refugees to according
them a form of recognition that approached, but did not reach, nationhood.
Following a pledge made at the Wye River conference, President Clinton visited Gaza
to attend the December 14, 1998 meeting of the PLO National Council, at which the Council
voted by show of hands to reaffirm that the PLO Covenant had been amended to remove anti-
Israeli references. President Clinton met Arafat at the White House on March 23, 1999,
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Secretary of State Madeleine Albright met Arafat at Sharm al-Shaykh on September 4, 1999,
President Clinton met Arafat again on November 2, 1999, and twice in 2000.
U.S. Aid for the Palestinians
At an October 1, 1993, Washington meeting, 46 donor nations pledged $2.4 billion for
the Palestinian entity. The U.S. Administration offered $500 million ($125 million in loans
or loan guarantees and $375 million in grants) over 5 years for economic development of the
Palestinian entity. Of the $125 million available in loan guarantees, only $3 million had been
drawn through April 2001. The United States provided funding for the Palestinian Authority
through the Holst Fund of the World Bank, through private voluntary organizations (PVOs),
and through USAID contracts. No U.S. aid went directly to the PLO.
Of the total $49.268 million obligated for the “transition to self rule” function, $46
million was scheduled to go to the Palestinian Authority through the World Bank Holst Fund.
Of the $46 million scheduled to be transferred to the Holst Fund for the PA, $36 million was
transferred in FY1994-1995, and the remaining $10 million, obligated for FY1997, was
transferred to Jordan in the 1998 appropriations bill after the Chairman of the House
International Relations Committee had placed a hold on transferring the funds to the PA. The
remaining $332 million provided through FY1998 went to the Palestinians through PVOs
(20%) and contractors (80%).
The Administration requested $80 million for the Palestinians for FY1995 and the House
Appropriations committee report on H.R. 4426, the foreign operations appropriations bill,
recommended $78.4 million for the West Bank and Gaza for FY1995. The Administration
requested $76 million for the West Bank and Gaza for FY1996, and the House
Appropriations Committee recommended $75 million for the Palestinians for FY1996 (H.R.
1868, H.Rept. 104-143, June 15, 1995). The Administration requested $75 million for the
West Bank and Gaza for FY1997, the House recommended funding the West Bank and Gaza
at the requested level (H.R. 3540, H.Rept. 104-600), but the Senate neither supported nor
opposed the funding level, calling instead for an assessment of projects funded by U.S. aid
(S.Rept. 104-295). The Administration requested $75 million for the West Bank and Gaza
for FY1998, $75 million for FY1999, and $100 million for FY2000. There are no earmarks
for the Palestinians in the FY1995 through FY2001 appropriations legislation. The conference
report on the FY2000 Foreign Operations Appropriations bill (H.R. 2606, H.Rept. 106-339)
said funding for the Palestinians should remain at the previous year’s level ($75 million):
President Clinton vetoed the bill.
Section 563 of S. 2522, introduced on May 9, 2000, prohibits U.S. aid for the
Palestinian Authority, but provides a presidential waiver if such aid is in the U.S. national
interest. The United States has not given any aid to the PA since 1995. H.R. 5272, which
passed the House on September 27, 2000, by a vote of 385 to 27, would stop all U.S. aid to
the Palestinians except humanitarian aid if the Palestinians unilaterally declare a state.
On November 14, 2000, President Clinton requested an emergency appropriation that
included an unspecified amount for FY2002 for the Palestinians to be drawn from $150
million to be shared among Egypt, Jordan, and the Palestinians. The request submitted to
Congress also included $450 million for Israel, $225 million for Egypt, and $75 million for
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Jordan for FY2001, and an additional $350 million for Israel for FY2002. The 106th Congress
adjourned without acting on the request.
Table 1. U.S. Aid Obligations to the Palestinians, 1994-1998
(millions of dollars)
FY1994-
Program
Totals*
FY1996
FY1997
FY1998
1995
Expand Economic Opportunity
65.814
26.410
16.182
14.219
9.003
Scarce Water
193.269
69.832
32.764
50.969
39.704
Governance
35.160
3.073
9.364
11.500
11.223
Transition to Self Rule
49.268*
39.132
.136
10.000
0
Short Term Develop. Needs
24.754
17.839
5.860
.300
.755
Totals
368.265
156.286
64.306
86.988
60.685
Source: USAID Statistical Annex - FY1997, p. 139-141, and telephone conversation January 1999.
Wye Agreement Funding. On November 30, 1998, President Clinton told the donors
conference in Washington that the United States would provide $400 million in grants for the
Palestinians, $200 million of which would be provided in FY1999, $100 million in FY2000,
and $100 million in FY2001. (The President also requested $1.2 billion for Israel and $300
million for Jordan to implement the Wye Agreement.) Congress did not include funding for
the Wye Agreement in the Foreign Operations Appropriations bills for FY2000 (H.R. 2606,
S. 1234). The President vetoed H.R. 2606 in part because it did not contain funding for the
Wye Agreement. After negotiations with the White House, the House of Representatives
passed H.R. 3196 on November 5, 1999, that included the Wye Agreement funding; $1.2
billion for Israel, $200 million for Jordan, $25 million for Egypt, and $400 million for the
Palestinians. H.R. 3196 was set aside and replaced with H.R. 3422, which was included by
reference in H.R. 3194, the consolidated appropriations bill passed by the House on
November 18, by the Senate on November 19, and presented to the President on November
22, 1999. The $400 million Wye supplemental was in addition to annual aid levels of about
$75 million.
According to a State Department report presented to Congress in late October 1999, the
Wye funding for the Palestinians would be spent as follows:
Palestinians: $400 million
$100 million — Community Development (health, education, water, infrastructure, services)
$30 million — Rule of Law (law enforcement, human rights, train judges, prosecutors,
lawyers, etc.)
$10 million — Industrial Estate - West Bank
$100 million — Gaza Port, Gaza-West Bank passageway
$30 million — Scholarship Fund
$100 million — Janin-Nablus Road
$30 million — Contingency Fund
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(See CRS Report RS20895, Palestinians: U.S. Assistance, April 17, 2001, 6 p.)
Congress and the PLO
Congress stated its opposition to the U.N. special committee on Palestinian rights
(Section 614, P.L. 95-426, October 7, 1978), opposed U.S. participation in the International
Monetary Fund if the IMF granted membership to the PLO (Section 7, P.L. 96-389, October
7, 1980), and stated that U.S. funds contributed to the U.N. could not be used to support the
PLO (Section 154, P.L. 97-377, December 21, 1982). In 1984, Congress prohibited U.S.
government employees from negotiating with or recognizing the PLO unless and until the
PLO recognized Israel’s right to exist, accepted U.N. Resolutions 242 and 338, and
renounced terrorism (Section 535, P.L. 98- 473, October 12, 1984).
In 1987, Congress declared the PLO to be a terrorist organization and a threat to U.S.
interests, and ordered the PLO information office in Washington and the office of the PLO
U.N. mission in New York to be closed (Title X of P.L. 100-204, December 22, 1987). The
Department of State closed the Washington office, but the New York office remained open
after a judge ruled that the office was legal under the U.N. treaty signed by the United States.
The Washington office reopened in September 1993, after the PLO and Israel signed the
Declaration of Principles under waiver provisions in the Middle East Peace Facilitation Act.
The PLO office closed on August 12, 1997, when the Middle East Peace Facilitation Act
expired because the presidential waiver expired with the act. The PLO office reopened on
December 6, 1997, when the President exercised the waiver in Section 539(d) of P.L. 105-
118, the foreign operations appropriations law. The office remains open under subsequent
presidential waivers provided in the foreign operations appropriations bills.
In 1989, Congress added Title VIII, the PLO Commitments Compliance Act, to P.L.
101-246, signed into law on February 16, 1990, which repeated the prohibition against
negotiating with the PLO, stated the sense of Congress that the United States should seek to
prevent PLO involvement in terrorism, said the United States should obtain an accounting
from the PLO of several listed incursions into Israel, required the Secretary of State to report
to the Congress on the PLO explanation of the incursions, and required the President to file
quarterly reports on several listed PLO activities and positions. The Secretary of State sent
the first PLO Compliance Act report to Congress on January 11, 1994, stating that the PLO
remained opposed to terrorism and that the United States would continue the dialogue
resumed on September 10, 1993.
Following the signing of the Declaration of Principles on September 13, 1993, Congress
passed the Middle East Peace Facilitation Act (MEPFA) granting the President the authority
to waive sections of existing law that forbid contacts with the PLO, that prohibit the PLO
from opening an office in the United States, or that constrict providing aid to the PLO
through the United Nations. (The Middle East Peace Facilitation Act of 1993, P.L. 103-125,
October 28, 1993; amended and renewed several times, most recently in P.L. 104-107,
February 12, 1996). The current MEPFA and the President’s waiver authority expired on
August 12, 1997. The most recent combined MEPFA-PLOCCA report to Congress appeared
on January 12, 1997, covered both the PLO Commitment Compliance Act and the Middle
East Peace Facilitation Act, and found that the PLO was complying with its commitments,
and the most recent PLOCCA report, filed on March 31, 2001, for the June-December 2000
period, found the PLO in compliance with their commitments.
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In May 1997, Members of Congress threatened to cut U.S. aid to the Palestinians
because Palestinian leaders advocated applying a 1973 Jordanian law that called for the death
penalty for Palestinians who sold land to Israelis or Jews. On June 10, 1997, the House
passed by voice vote an amendment to H.R. 1757, the Foreign Relations Authorization bill,
that called upon Palestinian leaders to renounce the death penalty, and stated that the
President and Congress will consider Palestinian actions when considering renewal of the
Middle East Peace Facilitation Act that expired on August 12, 1997. Other Members of
Congress suggested cutting aid to the Palestinians because they believed that the PLO or the
Palestinian Authority incited recent terror attacks against Israel. News reports that an internal
PA audit released on May 25, 1997, disclosed corruption and waste prompted other Members
of Congress to question U.S. aid to the Palestinians. After allowing the Middle East Peace
Facilitation Act to expire on August 12, 1997, Congress added sections to the Foreign
Operations Appropriations bill, H.R. 2159, that gave the President waiver authority similar
to the MEPFA waivers. (See Sections 539(d), 552, and 566 of P.L. 105-118, November 26,
1997, and Sections 553, 556, and 566 of P.L. 105-277 of October 21, 1998, Section 538(d)
of H.R. 3194 of November 19, 1999.) On December 6, 1997, June 3, 1998, and October 22,
1999, the President exercised his waiver to allow the PLO office in Washington to remain
open.
Section 584 of P.L. 105-277 of November 21, 1998, and Section 578 of H.R. 3194 of
November 19, 1999, and Section 574 of P.L. 106-429 of November 6, 2000, prohibit any aid
funds for the Palestine Broadcasting Corporation (PBC). The United States provided about
$250,000 for training and equipment for the PBC in 1995 but withdrew the aid when it was
feared that Arafat would use the public station for political purposes. The United States
continues to help Palestinian journalists, but does not provide direct support to the PBC.
The House of Representatives passed H.Con.Res. 426 by a vote of 365 to 30 on October
25, 2000; the resolution expressed solidarity with Israel and condemned Palestinian Arab
leaders for encouraging violence in the continuing confrontations that began following Likud
Party leader Sharon’s visit to the Haram al-Sharif/Temple Mount area of Jerusalem on
September 28.
Eighty-seven U.S. Senators and 209 Representatives signed similar letters to President
Bush on April 5, 2001, advising that Palestine President Arafat not be invited to the White
House until the Intifadah ended, that the Palestinian leadership was responsible for
orchestrating the Intifadah, and that the United States should stop aid to the Palestinians.
Palestinian Statehood. On November 15, 1988, the Palestine Liberation
Organization National Council declared a Palestinian state with its capital in Jerusalem. Some
100 nations recognized the new state even though it did not have a government or any
territory under its sovereignty. Despite the 1988 declaration, in February 1998, Palestinian
leader Arafat said he would declare a state unilaterally on May 4, 1999, the date set in the
1994 Gaza-Jericho Agreement for completing the permanent status talks. Later Arafat
delayed the declaration while Israel held its elections and during the negotiations that led up
to the Wye and Sharm al-Shaykh agreements, but he later renewed his threat to declare the
state, selecting September 13, 2000, the new date the two sides set for completing the
permanent status negotiations. The PLO Central Council announced on September 10, 2000,
that the declaration of statehood would be delayed pending the outcome of the current peace
negotiations, but the declaration is further delayed by the Intifadah. Israeli leaders oppose the
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Palestinian declaration of statehood because they feel that the future status of the Palestinian
entity should be a subject in the talks.
Several U.S. Administrations have decried unilateral actions that could interrupt the
peace talks, and the Clinton Administration had cautioned Arafat not to declare a state
unilaterally. H.Con.Res. 24, passed by the House on March 16, 1999, and the Senate on
April 12, 1999, states that a unilateral declaration of Palestinian statehood would draw strong
congressional opposition and that the President should assert that a statehood declaration
would violate the Oslo accords. (Palestinian statehood is not mentioned in the Oslo
agreements.) The House voted 385 to 27 (with four present) on September 27, 2000, to pass
H.R. 5272, which would have cut off U.S. foreign assistance to the Palestinians if the
Palestinians declared a state without Israeli agreement.
Current Negotiations Between Israel
and the Palestinians
Prime Minister Ariel Sharon has stated repeatedly that Israel will not reopen the peace
talks until the Intifadah stops. From press reports, it appeared that Sharon got what he wanted
during his March 20, 2001 White House meeting with President Bush; a promise that the
United States would not intervene in the peace talks and a reassurance of U.S. support for
Israeli positions.
Palestinian and Israeli negotiators failed to reach any agreement prior to President
Clinton’s leaving office on January 20 but resumed talks at Taba, Egypt, on January 21, 2001.
The talks were suspended the week before the Israeli prime minister elections of February 6,
2001. Israeli Foreign Minister Peres met with Palestinian leaders at Athens in early April.
Palestinian, Israeli, and U.S. security officials met on April 5 at the home of the U.S.
Ambassador to Israel.
In March 2001, Israeli forces dug five-foot-wide, eight-foot-deep trenches around Arab
towns to channel all vehicular traffic through Israeli-manned check points. Student school
buses, trucks carrying products to market, ambulances, workers vehicles, all are delayed or
denied passage at the checkpoints. In the meantime, shooting incidents between the Israelis
and Palestinians increase in intensity and lethality; Palestinians use mortars, machine guns,
anti-tank weapons, and automatic rifles and Israelis use tanks, artillery, helicopter gun ships,
and small arms. Israeli Foreign Minister Peres met with Palestinian negotiators in April in
Athens, but no progress was reported. Meetings in early April between Palestinian and Israeli
security forces failed to restart security cooperation.
Unresolved Issues in the Palestine Problem
Jerusalem
Palestinians claim that Israel must withdraw from east Jerusalem, seized by Israel in the
1967 war along with the rest of the West Bank. Palestinians maintain that east Jerusalem will
become the capital of the Palestinian state. Israel, which has claimed Jerusalem as its capitol
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since 1948, annexed east Jerusalem in 1967, and claims that Jerusalem’s status is not
negotiable. No other country recognizes Israel’s annexation of east Jerusalem.
The July 25, 1994 Jordan-Israel non-belligerency agreement states that Israel “respects
... the special role” played by Jordan in Muslim religious shrines in Jerusalem. Arafat had
stated in the past that the Palestinian entity would be responsible for non-Jewish religious
shrines in the holy city. The Jordan-Israel agreement appears to set the stage for a future
contest or cooperation between Jordan and Palestine over the religious sites.
The United States has maintained a policy since 1967 that the future of the city must be
negotiated and cannot be decided unilaterally, and that the city should not be divided as it was
between 1948 and 1967. In 1990, Congress opposed the Administration position and passed
resolutions acknowledging that Jerusalem was the capital of Israel and should not be a divided
city (H.Con.Res. 290, passed on April 24, 1990, and S.Con.Res. 106, passed on March 22,
1990). In 1995, Congress passed S. 1322 (P.L. 104-45, November 8, 1995) that states that
the U.S. embassy should be moved from Tel Aviv to Jerusalem. (See CRS Report 94-755,
Jerusalem, dated February 25, 1995.) The Senate added Section 575 to H.R. 3540, the
appropriations bill, in July 1996, that stated that henceforth all U.S. government publications
would have to refer to Jerusalem as the capital of Israel, but the section was dropped in
conference. On July 27, 2000, President Clinton told an Israeli interviewer that he favored
moving the embassy to Jerusalem and would review the decision before the end of the year.
Boundaries
The Palestinians would prefer a return to the boundaries recommended by the United
Nations in Resolution 181 of 1947, but since 1974, have accepted the 1948-1967 boundaries
between the West Bank/Gaza and Israel. The Shamir government (1988- 1992) claimed all
of the West Bank as part of Israel, and would have made the boundary the Jordan River. It
is not clear what compromise the Rabin-Peres government (1992- 1996) would have offered
or accepted.
The Palestinian-Israeli Interim Agreement, September 1995, partitioned the 2,200 square
mile West Bank into a patchwork quilt composed of three different jurisdictions: Area A,
under full Palestinian control, about 1% of the total, was comprised of the seven largest cities
(excluding Jerusalem), primarily populated by Palestinian Arabs; Area B, under shared
Palestinian and Israeli control, about 27% of the West Bank, was comprised of Arab villages
around the cities; and Area C, under full Israeli control, about 72% of the total, was
comprised of Israeli settlements, so-called “state land,” highways, public areas, and Israeli
military bases. Israel withdrew from the Area A cities in December 1995-January 1996 (and
Hebron February 1997) and a few of the Area B villages, leaving the Palestinian Authority
in control of about 3% of the West Bank. Israel also withdrew from 70% of the Gaza Strip,
but retained four areas where there are Jewish settlements. The Netanyahu government ceded
another 7% of the West Bank in November 1998, in keeping with the Wye agreement, but
postponed further withdrawals until after the May 1999 election. The government of Ehud
Barak, sworn in July 1999, agreed in September 1999 to further withdrawals in September
and November 1999, and March 2000, that left about 18% of the West Bank in Palestinian
hands, 22% under shared Israeli-Palestinian control, and 60% under Israeli control.
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According to press reports in early May 2000, Israel offered to withdraw from a total
of 80% of the West Bank, withdrawing from 66% now and the remaining 14% after a couple
of years. Israel would annex the remaining 20%. The Palestinians rejected the offer. The
press reported on May 20 that Israel raised the offer to 90% of the West Bank, and an
unconfirmed rumor circulating in August 2000 said that the United States proposed that Israel
retain only 5% of the West Bank. Reports from the Camp David talks of July 2000 said the
figures under discussion ranged from 90% to 97%.
The United States has stated that boundaries should be negotiated and mutually
recognized, “should not reflect the weight of conquest,” and that adjustments in the pre- 1967
boundaries should be “insubstantial.” (See the statements by Secretary of State William
Rogers, December 9, 1969, President Lyndon Johnson on June 19, 1967, and President
Jimmy Carter, on March 16, 1977.)
Israeli Withdrawal from Occupied Territories
Israeli governments prior to 1977 said they would withdraw from parts of the occupied
territories, after boundary adjustments, although rejecting any withdrawal from Jerusalem,
which Israel annexed in 1967. The Begin government, elected in 1977, agreed to the Sinai
withdrawal as part of the 1979 Egyptian-Israeli peace treaty, but the Shamir government
claimed that the Israeli withdrawal from Sinai fulfilled any U.N. Resolution 242 obligation for
withdrawal, and that Israel should not withdraw from the West Bank, Gaza, or Golan (242,
passed in 1967, established the “land-for-peace” formula). The Declaration of Principles
signed in September 1993 called for a partial withdrawal from Gaza and Jericho,
accomplished in May 1994, and the September 1995 Agreement called for further Israeli
withdrawals from West Bank cities, accomplished in early 1996 and February 1997. Israel
offered to withdraw from 9% of the West Bank following the January 17, 1997 Hebron
agreement, but the Palestinians opposed the move because the amount of land was too small
and the Israelis did not negotiate the areas from which they withdrew.
Israel postponed implementing the Wye Agreement in December 1998 because the
Israelis said the Palestinians threatened to declare a Palestinian state. Further action under the
Wye Agreement was delayed in January 1999 by the call for Israeli elections in May 1999.
Newly elected Prime Minister Ehud Barak reopened talks with the Palestinians at Sharm al-
Shaykh, Egypt, on September 4, 1999, and Israel withdrew from about 7% of the Israeli
controlled section. A second withdrawal scheduled for November 15 (2% from shared to
Palestinian and 3% from Israeli to shared) was delayed until January 5, 2000, because the
Palestinians claimed the land in question should be negotiated and Israel claimed that only it
could select the parcels of land from which it would withdraw. Israel postponed another 6.1%
withdrawal scheduled for January 20, 2000, because the Israelis refused to surrender land
around Jerusalem .
The United States maintains that Israel should withdraw from the occupied territories
to negotiated boundaries. The U.S. position acknowledges the Israeli need for defensible
borders (erase some of the anomalies along the 1948-1967 armistice lines) and also
acknowledges the Palestinian desire for a territorial entity separate from Israeli rule. (For
example, see the statements of President Lyndon Johnson on June 19, 1967, Secretary of
State William Rogers on December 9, 1969, Secretary of State Henry Kissinger on August
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15, 1975, President Jimmy Carter on January 4, 1978, President Ronald Reagan on
September 1, 1982, or Secretary of State James Baker on May 22, 1989.)
Palestinians consider the Golan Heights part of Syria, not Palestine, but the Syrian-Israeli
negotiations over the Golan may affect Palestinian-Israeli negotiations over the West Bank
and Gaza. Persistent rumors from Israel and unconfirmed reports from Syria claim that the
Rabin-Peres government agreed to withdraw from most of the Golan Heights. The
Netanyahu government elected in May 1996, appeared less inclined to withdraw from Golan
and not inclined to meet a commitment made by its predecessor government. Periodic
unconfirmed rumors circulating in Israel suggest that Israeli-Syrian talks continue in secret.
Israeli Settlements in the Occupied Territories
The Arab nations maintain that Israeli settlements in the occupied territories are illegal
under international law, specifically paragraph 6 of Article 49 of the Fourth Geneva
Convention on the Protection of Civilian Persons in Time of War, which states: “The
occupying power shall not deport or transfer parts of its own civilian population into
territories it occupies.” Israel maintains that Jordan’s 1950 annexation of the West Bank was
not recognized by the international community, and therefore is illegal. Egypt never claimed
the Gaza Strip. Israel maintains that the two regions are not “occupied territories,” and are
not subject to the Geneva Convention and rightfully belong to Israel. Many nations, as
reflected in the votes on several U.N. General Assembly and Security Council resolutions,
believe that Israel is the occupying power, that the Geneva Convention applies, and that the
Israeli settlements are illegal. United States’ spokesmen, such as Ambassador George Bush
on September 25, 1971, Ambassador William Scranton on May 26, 1976, and Secretary of
State Cyrus Vance on March 21, 1980, have stated that the settlements are illegal. On March
12, 1999, U.S. special envoy for the Middle East Dennis Ross said that continued Israeli
expansion of settlements was “destructive to the pursuit of peace.”
The Arabs contend that Israel should stop settlement construction and expansion, and
that Israelis will have to withdraw from the settlements once the parties agree to peace. Israel
maintains that it has the right to continue settlement expansion until there is an agreement on
the permanent status of the territories. One pertinent example of Israeli settlement policy is
Jabal Abu Ghanaim (in Arabic or Har Homa in Hebrew) in southeast Jerusalem, where Israel
built 6,500 housing units for 30,000 Israeli settlers. Only about 2,000 of the units are
occupied, but the Israeli government announced in April 2001 that an additional 3,000 units
will be built. In early April Israel also announced that 700 home sites would be auctioned at
two other settlements in the West Bank. The United States issued a statement saying that the
Israeli expansion was “provocative” and inflaming an already volatile situation.” (Washington
Post, April 16, 2001.)
Compensation/Repatriation for Palestinian Refugees
Palestinians argue that paragraph 11 of U.N.G.A. Resolution 194 of December 11, 1948,
states that the Arab refugees have a choice between returning to the homes now in Israel that
they left during the 1947-1948 war, or receiving compensation for the lost property. Israel
argues that the Arabs abandoned their property voluntarily, and that the international
community should provide funding for resettling the Palestinian refugees in Arab countries.
Arabs claim the Jews drove them from their homes in 1948-1949. Some Israelis counter with
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a claim for compensation for property abandoned by Jews who left or were driven from Arab
countries in the aftermath of the 1948-1949 war.
Israel claims that allowing Palestinian refugees to return to homes left in 1948-1949 or
1967 will destroy the Jewish nature of Israel. Palestinians claim the right of return is a matter
of justice encased in international law. The argument may be one of perception rather than
physically moving a number of Palestinians into Israel: by accepting the right of return, Israel
may be accepting blame for forcing the refugees out of their homes in the first place, and the
Palestinians may be more interested in such a confession of guilt than in the actual return to
abandoned properties. (See CRS Report RS20616, Middle East Peace: The Refugee Issue,
June 29, 2000, 6 p.)
Demilitarized Zones and Peacekeeping Forces
In the past, both Arabs and Israelis have accepted demilitarized zones and peacekeeping
forces stationed in the zones or along the borders, although Israel will not accept
peacekeeping forces in its territory. PLO leader Yasir Arafat told Radio Cairo on October
25, 1991, that the Palestinians would accept an international peacekeeping force to guarantee
Israel’s security. Many believe the Palestinians will accept demilitarizing the West Bank/Gaza
state they hope to form. Israel rejected a Palestinian suggestion that the Israeli Defense
Forces withdraw from the occupied territories to be replaced by an international peacekeeping
force to maintain order during the 5-year interim period, but Israel did accept 35 Danish, 90
Norwegian, and 35 Italian observers in Hebron in April 1994 (the Hebron observer
experiment did not work out as well as anticipated). Arafat suggested, in September 1996,
that the United States send a peacekeeping force to police Hebron, but the suggestion was
dismissed immediately by Israel and the United States. The United States vetoed a U.N.
Security Council resolution on March 27, 2001, that would have created a U.N. observer
force to monitor Israeli actions against Palestinians in the occupied territories.
Palestinians and the Peace Process
The Palestine Liberation Organization and
Palestinian Representation
The PLO was founded by the Arab League in 1964 (although some claim predecessor
groups date back to the 1950s). The PLO is an umbrella organization composed of many
constituent groups, the most prominent of which are the several military groups that have
been involved in unconventional warfare against Israel. Other groups represented within the
PLO are humanitarian agencies, welfare organizations, educational groups, medical
institutions, professional organizations, women’s groups, workers, and others. These groups
are represented in the Palestine National Council (PNC), the 600+ member parliament, in the
90-member Central Council, which acts as a steering committee when the PNC is not in
session, and the 18-member Executive Committee (four of whom resigned in opposition to
the Declaration of Principles), which acts as a cabinet. The PLO is supported by taxes
collected from Palestinian workers in Arab countries, from donations, from contributions
from other Arab governments, and from profits of PLO business enterprises. Several Arab
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governments stopped their contributions to the PLO because of PLO support for Iraq’s
invasion of Kuwait in 1990.
In the past, Israeli leaders rejected the PLO as the Palestinian representative, claiming
that the PLO is a terrorist organization committed to destroying Israel. On September 10,
1993, Prime Minister Rabin and Chairman Arafat exchanged letters granting mutual
recognition.
Opposition
Not all Palestinians support the peace talks. A few Palestinians, primarily represented
by groups headquartered in Damascus, prefer to maintain the state of war until Israel is
defeated and the state of Israel is removed from the Middle East. Another group of
Palestinians reject the September 1993 PLO-Israel agreement because it does not provide for
an independent Palestinian state, does not call for an immediate and complete Israeli
withdrawal from occupied territory, ties the Palestinian economy to Israel, and did not
provide for immediate release of all Palestinian prisoners in Israeli jails. Among the groups
opposing the peace process are the Popular Front for the Liberation of Palestine (PFLP), the
Palestine Liberation Front (PLF), the PFLP-General Command (all in Damascus), and Hamas
in the occupied territories. The Democratic Front for the Liberation of Palestine (DFLP)
shifted to supporting the talks.
The Palestinian Entity
Government
On May 12, 1994, PLO Chairman Arafat named 15 members of a 24-person cabinet to
govern the Gaza/Jericho enclaves. On May 24, 1994, Arafat canceled all Israeli laws and
reinstated pre-1967 laws in Gaza and Jericho in an attempt to erase the Israeli occupation
presence. Under terms of the September 13, 1993 Declaration of Principles, the Palestinian
cabinet assumed responsibility for health, education and culture, social welfare, direct
taxation, and tourism. The 88-seat Palestinian Authority (also called the Palestinian
Legislative Council or the Palestinian National Authority), elected on January 20, 1996, and
sworn in on March 7, 1996, and the 26-person cabinet named by “President” Yasir Arafat on
May 9, 1996, assumed responsibility over other functions of government except for security
and foreign relations, which Israel controlled through the 5-year interim and into the final
negotiating period. Arafat named a new 34-person cabinet on August 5, 1998, to avoid a vote
of confidence in the Palestinian Legislative Council. There was wide-spread criticism of the
new cabinet because Arafat retained most of the old members, many of whom were the
targets of corruption charges.
Police. According to negotiations following the May 4, 1994 agreement, the
Palestinian enclaves were to be protected by a Palestinian police force drawn from the
Palestine Liberation Army (PLA) units stationed in Egypt, Jordan, and Iraq, and Palestinians
recruited from the occupied territories, Jordan, Egypt, Yemen, Tunisia, and other Palestinian
concentrations. The Palestinian police began arriving in Gaza on May 11 and in Jericho on
May 12, 1994, replacing the Israeli Defense Forces and Israeli border police. Other nations
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have provided training (Egypt, Jordan, Great Britain, Iraq), vehicles (the United States
donated 200 light and heavy trucks, Russia donated armored vehicles, Greece donated 58
trucks), uniforms (Norway), communications equipment (Spain), anti-riot gear (Great
Britain), housing and offices (Japan and Germany), and cash (the United States $5 million,
European Union). The Palestinian police will have to cooperate with the Israeli police in
patrolling the borders and the villages, manning crossing points, and maintaining order.
Paragraph 3 of Article IV of Annex I of the Interim Agreement of September 28, 1995, states
that the Palestinian police force shall number 12,000 in the West Bank and 18,000 in the Gaza
Strip. According to Palestinian reports, there are about 30,000 uniformed Palestinian police
and another 3 to 4,000 clerical and support personnel. Israel claims that there are between
36,000, and 40,000 Palestinian police in uniform; some Israelis claim there are 50,000 police.
Economy
The multilateral working group on economic development requested a World Bank
study on the economic needs of the West Bank and Gaza. The World Bank report, issued in
September 1993, recommended $1.35 billion in investment during the 5-year interim period,
and $1.6 billion in long-term investment needed after a final settlement was implemented.
The United States chaired the meetings in Washington in October 1993, and November
1998, attended by more than 40 donor nations, to coordinate pledges to the Palestinian entity.
Participants at the 1993 meeting pledged a total of $2.4 billion over 5 years, including $500
million from the United States, and donors pledged an additional $2 billion at the 1998
meeting, including $400 million from the United States. The World Bank distributes and
monitors some, but not all, the donor funding. The donors continue meeting regularly.
The donors faced several questions in creating the Palestinian fund. Should
contributions to the Palestinian entity be tied to progress in the peace process? Should the
contributions be grants, loans, or loan guarantees, and should loans be concessionary or
market rate? Who would select projects to be funded, the donors, the World Bank, the
Palestinians, and if yes, which Palestinians? Should the donors fund large projects, such as
highways, large-scale public or low-cost housing, a port at Gaza, a Mediterranean-Dead Sea
canal, or should the projects be small, such as local schools and hospitals, agricultural
marketing centers, cottage industries? Would donors disburse funds directly to projects, or
to the Palestinian agency for disbursal to projects, or would all funds go through the World
Bank acting as a secretariat? Would the World Bank disburse funds to the Palestinian agency
or to contractors? Who would monitor projects? Will Israel have a veto over projects? Who
would be held accountable if a project failed, the World Bank, the Palestinian agency, the
contractors? And, should donated funds be used only for infrastructure projects or should
some of the funding be used for recurring costs, such as PLO police salaries, at least until the
Palestinian entity became economically self-sustaining. The World Bank established the Holst
Fund to collect and disburse funds, and established an office in Gaza.
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Other Aspects of the Palestinians
Terrorism
Individual Palestinians and Palestinian military groups, both PLO and non-PLO, have
launched terror attacks against Israeli people and facilities. Palestinian terrorists also have
attacked people or institutions that, in the Palestinians view, support Israel, including U.S.
citizens, property, and installations. One of the conditions set by Congress in 1984 for
beginning a U.S. dialogue with the PLO was that the PLO renounce terrorism, which it did
in November and December 1988. But when the PLO refused to renounce the May 30, 1990,
attempted military landing near Tel Aviv, the United States broke off the dialogue. Israel
maintained that the PLO is a terrorist group. Until January 1993, any contact between an
Israeli or anyone under Israeli occupation and the PLO was a crime in Israel. Many
Palestinians view the attacks against Israel and its supporters as part of the legitimate
Palestinian armed struggle to secure Palestinian rights, and view Israeli attacks against Arab
civilians as terrorism. On October 8, 1999, the Democratic Front for the Liberation of
Palestine was removed from the State Department’s terrorism list after the DFLP had agreed
to rejoin the PLO and accept a peaceful resolution of the dispute with Israel.
Intifadah, 1987
In December 1987, an incident in the Gaza Strip touched off a continuing anti- Israeli
civil uprising throughout the occupied territories that left about 1,900 Palestinians and almost
400 Israelis dead through April 1996. Some claim the Intifadah succeeded because the
uprising compelled Israel to join the Madrid peace talks in October 1991. Others disagree,
claiming Israel joined the Madrid talks at the insistence of the United States.
Palestine Refugees
Almost one-half of the world’s 6 million-plus Palestinians live in Israel or under Israeli
occupation. About 1 million Palestinian Arabs live in Israel and are Israeli citizens, who may
vote and are eligible to serve in the Knesset (11 Arabs were elected to the Knesset in May
1996). The 2 million Palestinians in the occupied territories are not Israeli citizens and do not
vote in Israeli elections. The 250,000 Israeli Jews who live in the occupied territories
(including east Jerusalem) do vote in Israeli elections. Jordan made all Palestinians in Jordan
citizens, but other Arab states have not offered blanket citizenship.
Of the 6 million Palestinians, 3 million are registered with the United Nations Relief and
Works Agency (UNRWA) as refugees from the 1947-1948 war. There is disagreement over
why the Palestinians became refugees: Israeli sources claim the Palestinians left their homes
voluntarily or because the Arab governments told them to leave; Arab sources claim the
Israelis forced the Palestinians to leave. Some but not all of the UNRWA registered refugees
receive food, shelter, clothing, medical treatment, education, and training from UNRWA.
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Table 2. World Population of Palestinians, 1998
Jordan
2,328,308
West Bank (Israeli occupation)
1,596,554
Israel
953,497
Gaza Strip (Israeli occupation)
1,004,498
Lebanon
430,183
Kuwait
37,696
The Americas
203,588
Syria
465,662
Saudi Arabia
274,762
Egypt
48,784
Other Persian Gulf States
105,578
Iraq, Libya
74,284
All Other
264,792
Total
7,788,186
Source: Miftah [http://www.miftah.org/FactSheets/sheets/refugees.htm].
Table 3. Palestine Arab Refugees Registered with UNRWA
1950 Total
2000 Total
No. of
No. in
Countries
Registered
Registered
Camps
Camps
Lebanon
127,600
376,472
12
210,715
Syria
82,194
383,199
10
111,712
Jordan
506,200
1,570,192
10
280,191
West Bank
—
583,009
19
157,676
Gaza Strip
198,227
824,622
8
451,186
Israel
45,800
—
—
—
Total
960,021
3,737,494
59
1,211,480
Source: Report of the Commissioner-General for UNRWA, Supplement 13 (A/55/13) 2000.
Note: West Bank included in Jordan in 1950. UNRWA stopped operating in Israel in 1952, when
Israel resettled its Arab refugees.
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