House of COMMONS






development assistance

and the occupied palestinian territories



Tuesday 31 October 2006



Evidence heard in Public Questions 108 - 171





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Oral Evidence

Taken before the International Development Committee

on Tuesday 31 October 2006

Members present

Malcolm Bruce, in the Chair

John Barrett

John Battle

John Bercow

Richard Burden

Joan Ruddock



Examination of Witnesses


Witnesses: Mr William Bell, Advocacy Officer, Christian Aid, Ms Floresca Karanasou, Middle East Programme Manager, Quaker Peace and Social Witness, Mr Adam Leach, Regional Director, Middle East, Eastern Europe, Commonwealth and Independent States, Oxfam, and Mr Henry Grunwald, Board of Deputies of British Jews, gave evidence.

Q108 Chairman: Good morning. Thank you for coming to help us with our inquiry. Perhaps I could ask you first to introduce yourselves and then I can explain how we are going to conduct the session today.

Mr Leach: It is not a pleasure to be here in the sense that it is difficult to be sitting here three years on from 2003 talking about the same situation again, but it is a pleasure to meet with the committee and with my fellow witnesses. I am Adam Leach. I am the Director for Oxfam's work in the Middle East and also in Central Asia, Russia and eastern Europe. Just to put our submission into context, we have been working in this part of the world together with the Palestinians in 1949 and then in the Occupied Territories and also in Israel more dedicatedly since the middle of the 1990s and of course for several years before that too.

Mr Grunwald: Henry Grunwald, the President of the Board of Deputies of British Jews.

Ms Karanasou: Floresca Karanasou. I am the Middle East Programme Manager for Quaker Peace and Social Witness, which is a department of the Religious Society of Friends in Britain.

Mr Bell: William Bell: I am responsible for advocacy on the Middle East, specifically for the Palestinians and Israel. Like Adam, I would like, in a sense, to commiserate with ourselves for being here three years on with a situation that sees ever greater insecurity for both Palestinians and Israelis, but a humanitarian situation that too often we see spiralling out of control. I would suggest it almost is out of control. That is our real concern. It would be interesting to see, in the course of the evidence, whether or not any of the recommendations that were made by this committee last time to the Government have actually either been following or managed to have any sort of impact on the situation.

Q109 Chairman: Thank you for that. As you will know collectively, we are going to Israel and the Occupied Territories next week, simply to see for ourselves, as best we can on the ground, what actually is happening and what is the state and condition of people there, to try to make a judgment. This is the International Development Committee. It is impossible of course for us not to look at the political background and the security situation, but our prime concern is how much, frankly, British taxpayers' money is being increasingly diverted to deal with poverty in a situation that is deteriorating and how much more should be done or what can be done to try to turn the situation round. Development, after all, is about enabling people to take command of their own destiny rather than being aid-dependent and increasingly aid‑dependent. Perhaps I can start, given obviously that we have had evidence from a number of quarters. We discussed last week with officials from the Foreign Office and from DFID the extent to which the international community first of all had anticipated the possibility of a Hamas victory, to which I think the answer was, we thought, not much, if at all, and whether they had really considered the consequences of then saying, as a result of that, "We cannot provide funding for the Palestinian Authority" and where that actually leaves people on the ground. Oxfam, in particular, had said that the international community were aware of the consequences of suspending aid and yet they went ahead with it. If that is your contention, that the international community knew that suspending aid would inevitably lead increased poverty and hardship, what do you think they should have done? First of all, should they not have suspended aid directly to the Palestinian Authority? That is for discussion. Secondly, it they had, what could and should they have done to have minimised the consequences of doing that? Can I also say, in terms of format, that obviously if any of you want to comment on an answer someone has made, that is all right, but do not feel that everyone needs to answer every question, otherwise we will be here until teatime.

Mr Leach: I think it is important to begin by saying that Oxfam is not a political institution, nor do I sit here to offer political solutions to the situation. Our position and our opposition to the suspension of aid was taken not on ideological grounds but because of the likely impact of a suspension of aid on the poverty and suffering of civilians. Oxfam has been consistent in its position, together with others, that it is civilians who are paying for the cost of this conflict. We have regularly reviewed our position on the suspension of aid and in reflection on the Temporary International Mechanism, but we feel that we could not and indeed we cannot support a scheme which effectively avoided existing mandated central and local institutions. So our concern about the suspension of aid was that this would not only lead to likely humanitarian damage, but would also undermine Palestinian institutions, which were the institutions recognised by the international community when they were set up to take care of the needs of ordinary people. With respect to your rather more difficult question about what should have happened, the issue is: what should pre-occupy the decision makers about the use of British taxpayers' money and how to move a peace process forward and not to impede it.

Mr Bell: I want to add to this and, in a sense, paint a picture of where we are now and then to comment and agree also with what Adam has said. I think it is worth noting that in terms of poverty, which is our mandate, in 1998, 20 % of the Palestinian population fell below the poverty line, i.e. 1.10 a day. By 2005, that had declined to 54 %. At this stage, I am merely saying what the figures are. I am not giving a reason as to why they are what they are. After the election of Hamas to the Palestinian Authority, that had climbed to 64 %. We now have a situation, before the official figures are out, where 78 % of Gazans live without any sort of income, which has to be, in part, as a result of the suspension of aid to the Hamas Government. Like Adam for Oxfam, for Christian Aid, I am acutely aware that the Government of Britain is caught between a rock and a hard place in terms of taxpayers' money, but if we are to see the real answer to tackling poverty amongst Palestinians and insecurity which, all too often, leads to the deaths of both Israelis and Palestinians, then we need to engage in a peace process. To isolate one of those governments, however distasteful we find its colour, is not going to move that peace process forward. Like Oxfam, we are particularly concerned with how we can move the peace process forward and how much more difficult that now is that we have chosen to cease any form of engagement and, rather than isolate Hamas and give voice to the radicals - and of those there are obviously far too many - actually to engage them further along the democratic process so that they are able to meet with the objectives, which we also agree with, of a commitment to non‑violence, a ratification or agreement with previous agreements made by the Palestinian Authority, and of course very importantly the recognition of Israel. We have agreed with all of those three objectives. Isolating the Palestinian Authority is not necessarily the best way of achieving that that government adheres to those principles.

Q110 Chairman: Presumably the international community, and certainly the Israeli Government, have taken a view, partly political, namely you have to jump through these hoops to be acceptable, but partly pragmatic, which says, "If we give money to the Palestinian Authority under form of Hamas, that money will go to terrorist organisations to promote hostile acts". That essentially is the argument. The practical question, and I do not know if you have an answer to it, is: if you accept at all that that is a legitimate concern, what alternatives to funding the Palestinian Authority do you think are open to the international community that would at least address the poverty problem?

Mr Leach: To pursue the earlier question, in the light of what you have just mentioned, I think the substantial amount of money that has been spent on supporting the Office of the President, 12 million I believe, is testament to the fact that resources could have been put into transparent mechanisms if the concern was about the misuse of money. What we are concerned about is that by withholding aid altogether and then supplying inadequate amounts in substitution for the amounts that had been paid and also paying them late so that there is a lag in payments, it is obviously that there is going to be an impact on ordinary people, given that it is the salaries of 150,000 workers or more that have been most obviously hit by the withholding of aid.

Mr Grunwald: The suspension of aid is pointed to and held up as an important factor, and in many ways it is, but let us not forget that the suspension of aid is something that happened comparatively recently. If we are really concerned about understanding the problems that face the Palestinians, then we have to go back and we have to look at what has happened to all of the many, many millions of dollars, euros, pounds, whatever, that have been given by many organisations as aid to the Palestinians and the uses to which that has been put. The suspension of aid may be a factor but it is not perhaps as important as the misuse of earlier funds, the fact that they have not gone to the purpose for which they should have been used, which was the alleviation of Palestinian poverty, proper development within the Palestinian Territories, and widespread corruption. I have to say that on our part we can understand why the international community felt it necessary to lay down the three conditions that have already been referred to, but equally we would hope that the international community, and the British Government in particular, would find a way of ensuring that funding does get through where it is most needed, but also where proper account can be made of how that money is used, so that we know that it is used for the purpose for which it is intended.

Q111 Joan Ruddock: On the point that you have just made about corruption, is it not generally accepted that Hamas was elected because it was anti-corruption?

Mr Grunwald: There is a strong feeling, as I understand it, that voting for Hamas was not necessarily a positive move, voting for everything that Hamas stood for, but it was certainly a stand against the endemic corruption that had been allowed to flourish within the Palestinian Authority, yes. The point I am making is that it is wrong to assume that the appalling condition of the Palestinians has only come about because aid has been suspended. It may have been exacerbated by that, but it is an underlying problem that has existed for many, many reasons for far too long.

Q112 Joan Ruddock: My point is perhaps that the people themselves sought to address that in the way that they democratically elected the Palestinian Authority?

Mr Grunwald: They may have done.

Q113 John Battle: I was going towards the analysis of the causes but could I continue to focus for a few moments on the reality of the situation now for people who need a livelihood. I wondered if I could ask about the Temporary International Mechanism. We have had the Secretary of State as a witness before us putting great store on the Temporary International Mechanism and saying that that would work. What is your assessment of that Temporary International Mechanism? Was it implemented properly? Are there sufficient funds available through it? What is your view now of TIM, as it is euphemistically called?

Mr Leach: May I begin on the answer to that? With no disrespect to officials responsible for implementing the mechanism, we have to be careful not to get locked in a pernicious argument about an instrument that is likely to result in problems either way. If you limit the Temporary International Mechanism, then it means that there will be more people who suffer because there is not enough money going through the system. If you expand it, you erode Palestinian institutions further. Our concern is that we do not get locked into a discussion about an instrument, which was faulty from the beginning, conceptually, and inappropriate and unlikely to deliver the result, and recognised to be unlikely to deliver, the result for which it was intended. We consulted with a wide range of officials from the international community, including people in the Foreign Office, and we made our feelings known publicly in a letter addressed to the Quartet about the risks of the TIM.

Q114 John Battle: Could I push this? I think the figure that the Secretary of State gave in an answer to a written question in Parliament on 20 October suggested that TIM is functioning and that under Window III payments are now being delivered to 98,000 individuals, so that would be up. Since we have had submission from yourselves, do you think that the delivery of payments is improving? Is it less? Are those facts wrong?

Mr Leach: I am not disputing those facts as stated here, but I think the point is that only about 30 % of workers who were formerly receiving salaries have received payments under that. That means a consequential increase of five times on people who are dependent on those salaries. However well it has been working to date - and I want to stress the point about a lag in payments, which I think has had further impacts - I would say that it is far from adequate.

Q115 John Barrett: Can I raise this more specifically under Window II, which is for energy utilities and fuel, there have been EU reports about difficulties of fuel being supplied into Gaza. Could anyone say how well fuel distribution has been managed under Window II and the impact of the lack of fuel into the area?

Mr Bell: I would be quite happy to say a little bit about the impact. I would not go into a lot of detail in terms of the Temporary International Mechanism in the way that Oxfam have. I would say that the impact has been critical in the sense that there have been huge shortages. For example, Nahal Oz, which is the pipeline crossing between Israel and Gaza, has indeed been open for some of the time, but it worth noting that the estimated daily needs of diesel in Gaza - and obviously that is critical at a time when electricity supplies are sporadic and difficult - are 700,000 litres. In July 2006, the average volume of daily imports through that crossing was only 205,000 litres. The knock-on effect is obvious in terms of the way in which people manage. It is very easy to look at the hospital and the municipal buildings and see how life is difficult for them, but in terms of the poorer sections of society, we are looking at a situation where people's diet is greatly affected in the sense that they certainly cannot run any form of refrigeration that is reliable. Suffice to say that all supplies, not just diesel and petrol, are very difficult to plan for and guarantee in Gaza, given the way in which the crossings are closed. Again, I am not putting a reason on why those crossings are closed. I am merely pointing out the humanitarian impact of the crossings being closed; the local population do suffer a great deal. Just one last point on the crossings, the Karni crossing, which is the main commercial crossing for both humanitarian supplies and goods, between January and August of this year was closed for 42 % of the time. Obviously, for more than 50 % of the time it was open, but it is very difficult to plan, in terms of the economy, for your main lifeline with the rest of the world with it not being open.

Mr Grunwald: May I just say that it seems to us that the Temporary International Mechanism is one way round the situation which the election of Hamas has put everybody into. It is the sort of undertaking of which we ought to see more because it is a way of ensuring that monies get directly to where they are needed, which of course means that there is less likelihood of their being diverted to uses that I am sure no-one in this room would wish them to be put to. It is something which we all hope is only going to be temporary, but it is something for which the British Government is to be commended for having participated in and perhaps it needs to be expanded to ensure that more funds get more directly to where they are needed. If I can come back to the question of the crossings, of course the crossing into Gaza are a very serious issue to and from. They are vital in every sense. I do not dispute the figure that you have just been given, but the committee has to be aware and must take note of why the crossings are closed. They are closed, as we understand it, for security reasons, and often for good reason.

Q116 Chairman: We want to explore the crossings issue in a bit more detail in a moment. We will come back to it.

Mr Leach: May I add an answer to John's question about the impact on fuel? We know from the Union of Health Workers Committee that something like 300 litres a day of fuel has been supplied under the TIM but that 400 litres are needed each day, so there is clearly a shortfall with consequential impacts on health services. To add to the earlier point made by William, the non-payment of salaries has effects on the supply of services more generally because, for instance, prior to the Israeli disengagement from Gaza, something like 95 % of household water bills were being paid, and now something like only 25 % of water bills are being paid. That means that there is not money in the system to pay workers, therefore services do not get supplied, and therefore the lack of fuel adds to a declining situation, a deteriorating situation.

Q117 John Barrett: Can I move on to the supply of health care and supplies to hospitals? At a previous evidence session when evidence was given to us by UNCIFEF, they were saying effectively Window I, which covers these basic health supplies, was not operating at all. I wonder if you have any comments on the obstacles towards Window I being effective.

Mr Leach: We know from some agencies in Belgium that a partner organisation of theirs has experienced difficulties because of having rapidly to scale up activity to meet an influx of cases which happen. I think if Window I has been ineffective, then Non-Government Organisations have had to come in and fill the gap and they have not had the resources to be able to do so.

Ms Karanasou: I would like to raise a concern not so much in the context of the quantities of money given through TIM but about the way aid is channelled at present through the Palestinian President's Office. President Mahmoud Abbas is an elected President but he is also the Deputy Chairman of a political faction, Fatah, who lost the election. Our concern is that by channelling aid through the President's Office, aid can become a tool to exacerbate intra-Palestinian tensions and conflict.

Chairman: Can I stop you there? I think John Bercow is going to explore that. It might be helpful if John puts that question and then you come back on it.

Q118 John Bercow: I am interested in the mindset that produces the initial response that you have just offered. I would like to approach the issue from the vantage point not of what might be intra-Palestinian rivalries or tensions but from what I should have thought was the principal purpose of the provision and the funding, namely its efficacy or otherwise in meeting the needs of the people in whose interests it is provided. That really was what underlay the question that I was about to put, and will not put, partly to William though others may wish to come on this. That is: what assessment has Christian Aid made of the likely impact of channelling funding, I think so far intended to be the tune of about 10 million through the Office of the President, and why do you regard, as you apparently do, the building up and the promotion of parallel institutions as an inherently negative development?

Mr Bell: I think the problem that needs to be addressed here is: how temporary is temporary? Over the last 12 years or so since the establishment of the Palestinian Authority, many, many millions, indeed probably billions, of taxpayers' money from this country and around the world has gone into attempting to develop a Palestinian Authority with a government that is able to deliver vital services to its people. As the Board of Deputies has pointed out, and we would not disagree with it, that government, unfortunately, was characterised by one of patronage and corruption, which did very little actually to serve the needs of the people. We do not dispute that. However, there were good examples of where certain ministries of that Palestinian Authority were beginning to address the needs of the population, notably in health and in some cases education. There was a relationship being developed with civil society that was becoming healthier. It is impossible to look at the Temporary International Mechanism now from outside the political establishment that Palestine is; namely, that the President's Office, as my colleague has correctly said, belongs to one particular political movement that was particularly sore at losing an election which many others saw as inevitable and perhaps just as a result of having been corrupt. I think that if we go along with the idea of funding everything through the President's Office, we undermine the opportunity for the Palestinian political establishment actually to develop in a meaningful way that responds to the democratic needs of those people. We are seeing externally, whatever our motives may be, and I am not suggesting that the motives of the British Government are anything other than to try to address the humanitarian needs of the Palestinian population, that one of the inevitable side‑effects of this type of channelling will be to exacerbate the rivalry between Fatah and Hamas, which unfortunately we have seen and many predicted, and many will predict still, will get much worse - rivalry which is resulting in open warfare on the streets, certainly in Gaza, but to a degree elsewhere. Anything that exacerbates that is not in the long-term interests certainly of the humanitarian needs of the Palestinian people but also it does not, in a sense, serve the actual peace process that both the Palestinians and Israelis sorely need.

Ms Karanasou: I want to continue the point I wanted to make earlier that it is not only that aid is in danger of exacerbating an existing political conflict, since the money is channelled through the leader of a political faction, after all, which is engaged in a bitter political struggle with the party that has won the election, but also this practice contradicts one of DFID's policy goals as expressed in a recent conflict policy paper, which has been opened up for public consultation and to which Quaker Peace and Social Witness has submitted response. This paper states that development aid influences the political dynamics of conflict. It can, for example, introduce resources that hold the power relationships in ways that fuel local tensions. Under policy goal III, it states, that it will minimise the potential for worsening conflict by making sure that all our development work takes full account of its potential impact on conflict dynamics. Later it states: All our efforts to promote development must ensure that they do not exacerbate conflict and that, where possible, they try to prevent violent conflict. Unfortunately, this does not seem to be happening with this practice.

Q119 John Bercow: I understand the force of the argument and it may well be that it is valid. I would like to pursue the issue slightly further by seeking to establish whether the logical conclusion of the remarks that you have both made is that no such funding should go through the Office of the President. So that all angles are explored and the voice of the Devil's advocate is heard, can I put to you the question: is it not above all important that the aid provided should be effectively used? That is a more important consideration than the avoidance of internecine arguments. Therefore, if there is not to be what might be called a rival or competitive dilemma of funding through the Office of the President as a potential counterweight to provision to the Palestinian institutions, what other means are there, other than external controls I suppose, to incentivise the effective delivery of aid by the Palestinian institutions themselves?

Mr Bell: That might be true if it were not for the possibility, and I think a strong possibility in this case, that it is exactly the internecine conflict that you refer to that is one of the reasons that makes it very difficult to make aid effective. It is the violence that is produced as a result of that. The long-term needs and where, as NGOs and we as British taxpayers and the Government, we have to focus is how can we get these two parties, and by that I mean Israelis and Palestinians, back onto a peace process that will deliver both development within the Occupied Territories themselves and, as importantly and critically, security for both Israelis and Palestinians because at the moment both security and development are sorely lacking. I am not sure whether the channelling of aid through the President's Office is going to address that problem. As you say, that has be, as development people, our primary objective.

Mr Leach: Can I add to the answer? We too would not argue against the establishment of an effective executive, but we would argue that without effective operational ministries, you will not get effective assistance. It is ordinary people who will pay the consequence. That fuels issues about faction but also representation or the ability to represent democratically and effectively, which further undermine security and stability. Our concern is about setting up vicious circles which cannot be broken and which cannot lead the outcome that I know we four support.

Chairman: I think the thrust of Mr Bercow's question is that we are genuinely looking for help in this. We can all have grand theories about the status of the problem and what might or might not happen, but, as an International Development Committee, we are also looking at what on earth, if are putting money into it, will it get it to the right people. It does not stop us having a debate about whether or not we should recognise that Hamas needs to be treated as a Palestinian Authority and not an add on.

Q120 John Bercow: In other words, Chairman, I do not really think that this particular question - there are many that are - is really inspired by or dependent upon a doctrinal point of view. It is really essentially a pragmatic question. Thank you for your answers.

Mr Grunwald: May I make take a contrary view perhaps to those of my three fellow witnesses, which is really to pick up on the point that you have just made, Sir, which is that if this is an effective way of getting aid to where it is needed, then at the moment it is the right path to take. If the alternative is that no aid gets to where it is needed, then that is no alternative.

Chairman: I think we understand what the concerns are. That has helped us to get more understanding.

Q121 Joan Ruddock: I would like to turn to the question of the revenues which the Government of Israel collects. It seems to me that this money is even more significant than the aid that we have been discussing. The aid we have been discussing is a matter of voluntary agreements. This, I would feel, is a matter of law, that Israel has an obligation. I wonder if Mr Grunwald could comment first on the withholding of the revenues that have been collected via taxes by the Israeli Government from the Palestinians. It is their money. Would you express your view on the fact that the Government of Israel withholds that money?

Mr Grunwald: It is their money and it remains Palestinian money and will be handed over, I understand, at some stage when proper arrangements can be in place - and I will explain what I mean by that in a moment - together, I am sure, with any interest that will accrue to that money while it is not being handed over. The reason that it is not being handed over is, as you say, that it is part of an agreement between Israel and the Palestinians. At the moment, there is no Palestinian body which can formally approach Israel and say, "Hand the money over". That may seem legalistic but the reason for that is really the same reason that you have already mentioned, that the Quartet and others have declined to pass money over to a Hamas entity. The Israeli Government, as I understand it, has said, "Until such time as we do have someone that we can do business with, which means Hamas renouncing violence, recognising Israel and indicating that it is prepared to abide by the agreements previously entered into by the Palestinian Authority with Israel, in the same way as international aid money will not be handed over, this money will not be handed over". It is an unhappy situation for everybody. It is perhaps made even worse - and I obviously made inquiries about this and I discovered that there have been attempts by Israel to make use of some of that money for the Palestinians. I understand that in June of this year, Israel offered some 50 million in shekels (about $12 million) worth of badly needed medicines and other things, but the answer came back: no, we will have the money but we will not have the medicine. The bottom line of that is that there is concern, and I can certainly understand it and I hope others will, that monies which are handed over to Hamas will not be used in the way that everyone would want to see them used, but will be used simply to enable Hamas to continue to attack Israel and to foment trouble in and around the area. That, I am afraid, is the bottom line.

Q122 Joan Ruddock: Accepting Hamas's violence and all the things that you have said, which of course we all absolutely abhor, there is no question, again as I understand it, that Hamas have actually been very effective in delivering local services to local people. That is what their electoral success has been based on. We are talking here about not $12 million but $55-$65 million per month. Surely it is reasonable to expect that if this money were handed over, it would go to pay the people who provide the vital services to the people of Palestine?

Mr Grunwald: You may hope that; I may hope that; and it may be that in time that is what will happen, but at the moment the Israeli position, and I have made inquiries about this knowing it would come up, is the same as that of the British Government and other members of the Quartet and others that no monies will go to a Hamas entity until they have renounced violence, recognised Israel and agreed to abide by previous agreements. You know, Hamas may have been good at providing services for Palestinians locally; it has also been very good at attacking Israel and killing and wounding Israelis from behind its borders and within Israel itself.

Q123 Joan Ruddock: In terms of the violence, I think we have to acknowledge there is violence on both sides. I do not want to pursue that point but the point that you suggest, that the Quartet and the Israeli Government are acting as one. That appears to us to be disputed. We understand the position of the UK Government is that the monies should not be withheld. That is the position of the UK Government. I want to ask you your view of the EU General Affairs Council, which has advised that the Israelis should pay the revenues through the Temporary International Mechanism. I wonder whether you would think that that is appropriate.

Mr Grunwald: I am sure that is something which the Israelis will consider. I cannot answer that. It may be a way forward.

Chairman: I can say that the Israeli Ambassador told us in an informal meeting last week that currently the Israeli authorities are not happy that TIM money would not be diverted to terrorism, which is why they would not do it. That is their current position. That is not formal evidence.

Q124 Joan Ruddock: I think, Chairman, if that is the case, what is the point of having a Temporary International Mechanism? Either it is decided it is a mechanism that can work and can do the job that is required to provide the services to the Palestinians or it is not. If it is not, then we are all wasting our time on it. If it is, then there is no reason why the Israeli Government, I suggest, should not put its money that way.

Mr Leach: May I add a comment in response to your question and a word of caution about de-linking the suspension of aid from the repayment of tax revenues? What we are concerned about is that the suspension of aid serves as a signal to the Government of Israel that it is appropriate to withhold tax revenues, which were supposed to be paid before the suspension of aid took effect anyway, so although the two issues are separate, we are concerned about signals that are inappropriate. I think it is unfortunate, too, that there is a conflation of interests between the international community and the Government of Israel. I think we are talking about a situation of a long-standing conflict, and we are all very well aware of the causes; we are talking about an illegal occupation; we are talking about the causes of humanitarian suffering which go well beyond (and I agree with Henry's earlier comments about taking a step back) the suspension of aid. Suspension of aid, we fear, acts as an unhelpful signal.

Q125 Chairman: As a matter of factual information, my understanding is that a substantial number of Palestinian civil servants are now on strike because they are not being paid, for these reasons. Do you have any idea how many there are and whether this is an indefinite strike or is it short term? Do you have any information on that?

Mr Leach: I would need to find out more information to supply to the committee in due course. I would be happy to do that.

Mr Bell: I give the same response. I would be happy to come back to the committee on that.

Q126 Richard Burden: I would like to look at the question of how easy it is for people to move about and for goods to move about. Obviously we have touched a bit on this in the discussions so far. This is an area where we have had contradictory evidence presented to us. I would like to ask you some questions both about Gaza and the West Bank. Can we start off in relation to Gaza. Mr Grunwald, in the Board of Deputies' evidence it states: "Despite Hamas' stance towards it, Israel has continued to implement the measures it set out in the post-Sharm El Sheikh humanitarian plan. Contrary to media and other misinformed reports, crossings between Israel and the Palestinian Territories have remained open - allowing goods, medicines, food and other supplies to pass through." Were you referring to Gaza and the West Bank or just Gaza or just the West Bank?

Mr Grunwald: I think there are differences between the two but underlying the situation in both is the justifiable concern for security.

Q127 Richard Burden: I understand that. I am just asking what that quote from your evidence was referring to?

Mr Grunwald: I think in terms of both.

Q128 Richard Burden: In relation to Gaza, we have had evidence submitted to us by the Welfare Association, who are not giving oral evidence today. They stated that the Erez crossing to Gaza was completely closed over the period 25 August to 25 September. The evidence you have put forward suggests that the crossing was open for at least eight days during that period.

Mr Grunwald: I would not have put that forward if we had not been satisfied that that was correct.

Q129 Richard Burden: Would that be eight full days for everybody wanting to go through it?

Mr Grunwald: I would have to check on that. It may be that it was open for limited purposes rather than wholly opened for the whole of that period. It may be that at times it was only open for people to cross as opposed to goods to cross.

Q130 Richard Burden: It is quite important, is it not, for Erez, if you are saying it is open, to have some sort of understanding of who can actually get through it and for how long? During those eight days, who was allowed to go through from Gaza to Erez?

Mr Grunwald: I would happily come back to you with detailed information on that if you would want it. I will make sure that you get the detail.

Q131 Chairman: There is a direct conflict. The Welfare Association says it was completely closed. You are saying it was at least partially open for some of that time?

Mr Grunwald: Yes.

Q132 Richard Burden: Would it surprise you to learn that a number of organisations have suggested that actually effectively the only people who can get to Erez are internationals?

Mr Grunwald: Yes, it would surprise me.

Q133 Richard Burden: You have mentioned in relation to Karni that security is the main reason for the closure of Karni for particular periods. If that is the case, presumably it is Israel's security you are worried about?

Mr Grunwald: Yes.

Q134 Richard Burden: Presumably, according to that logic, there may be closures for goods going out of Karni into Israel. Why should there be a closure of goods going into Gaza?

Mr Grunwald: I suppose it really depends on what is found at the crossings and what has been found at the crossings. It is very important that the committee should understand. I have spoken to various people about this because it is clearly a concern to everybody. There seems to be a feeling that these crossings are closed arbitrarily, that they are closed for no purpose, and sometimes even the suggestion is made that they are closed as some form of punishment. The reality is that if they are shut, they are shut for a good security reason. This is the most recent example that I can find, but there may have been others since. For example, just over a week ago on 22 October, six kilograms of weapon grade TNT was discovered at the Karni crossing ----

Q135 Richard Burden: Going which way?

Mr Grunwald: It was going from the Gaza into Israel. That was concealed in a medical container used to transfer goods from Gaza into Israel. I hope the concern about that will be evident. If these crossings are being used to take materials not Israel which can be used for terror attacks within Israel on Israeli citizens, I think everyone will understand that. Equally, there must be concerns about what is being taken out from Israel into Gaza, whether it is people who are being taken through, whether it is weapons that may have been used that have been taken up, one does not know. I hope it will be obvious that this is a two-way process with the concerns being there not only for what is going into Israel from Gaza but also from what is coming out of Israel back into Gaza.

Q136 Richard Burden: That is what I do not understand. What is the problem? Israel is on one side of that border and Gaza is on the other side of the border. If you have concerns for the security of Israel in that case of explosives being discovered and being transported into Israel, are you suggesting that there is a real risk of explosives going into Gaza from Israel?

Mr Grunwald: There may be a risk of people being transported across the border from Israel into Gaza.

Q137 Richard Burden: What sort of people from Israel?

Mr Grunwald: People who may have been involved in terrorist attacks or attempted terrorist attacks inside Israel. There have to be checks both ways.

Q138 Richard Burden: We are not talking about whether there are checks. We are talking about whether it is closed.

Mr Grunwald: The closures will depend on either information that has been received or on something actually being found.

Q139 Richard Burden: Karni has been closed for 42 % of the time. You said you did not disagree with what Mr Bell said on that. That is an awful lot of checks, is it not?

Mr Grunwald: Yes, it is an awful lot of checks, but the security situation inside Israel is one which is of enormous concern to the Israeli Government and authorities.

Q140 Richard Burden: Can we move to another issue, that of being able to move around in relation to Gaza, one of the important aspects of the Palestinian economy in Gaza, one of the ways that the Palestinian people could presumably fend for themselves a little bit is to fish off the coast of Gaza. Why are they not allowed to do that?

Mr Grunwald: I believe that restrictions may have been lifted in recent days. That is the information that was given to me, that some fishing is allowed. If restrictions have been in place, and I know they have for some time, then again it will have been for security reasons.

Q141 Richard Burden: Could you perhaps get that information for us and let us know what restrictions were in place and what has been lifted and how long it has been lifted for?

Mr Grunwald: Of course, yes.

Q142 Joan Ruddock: I was puzzled about the idea that the border has to be closed constantly because of security. The whole point of the information you gave us was that this material was discovered. Having been to Erez myself, it is a rigorous process; it takes a long time. Of course there need to be checks but checks are there in order to find problems and to eliminate the danger of those problems. With effective checking, it seems to me that is not a reason for them closing for long periods of time, sometimes many days at a time, because of that. When we have a crisis at the airports and we know that there are terrorists threatening British airports, we do not actually say that people must stop flying. We just have them wait longer in queues but they keep going and we keep testing and we find the problems. I find it rather difficult to accept your argument that at least this does not appear to be punishment when border crossing are closed for considerable periods of time.

Mr Grunwald: The suggestion of punishment is a very serious allegation to make.

Q143 Joan Ruddock: Indeed, but it feels like that to the people.

Mr Grunwald: It is one which really is not borne out by any examination of why these checks at the borders are necessary. Remember, we are talking not only about goods that come through formal entry points; we are talking about tunnels which are constantly being discovered in the area of the crossings and other parts of the borders. If, from time to time, operations are necessary to prevent anyone from entering or leaving, then I can only assure you that I am told that those are decisions that are not lightly made. They are made for operational security reasons in order to try to prevent whatever it is might be smuggled in or whatever it is might be smuggled under is intended for. It is a serious allegation to make that this is done to punish those who wish to cross. Obligations in relation to the borders and the crossings were placed on both sides by various agreements. I am afraid that the Israelis would say, as I understand it, that others have not really lived up to their sides of these agreements, which, had they been lived up to and had they been put into effect, would prevent an awful lot of the tension that exists at these crossing points.

Mr Bell: I hope I am not speaking out of turn here but I will speak anyway. This discussion is critical in the sense that it is talking about discussing Gaza's lifeline with the outside world, but it also addresses a critical point of the Palestinian territorial integrity. Oslo very clearly referred to the West Bank, Gaza Strip and East Jerusalem as one territorial unit. One of the grave impacts of these closures and one of the things that has not happened is that those areas have become ever more distant from each other and ever more fragmented. Whilst the peripheral crossings between Gaza and Israel and indeed Gaza and Egypt via Rafah are absolutely critical in terms of commerce and basic movement of both people and goods, I think one of the issues of real concern also that the committee needs to be aware of is that there are over 500 obstacles to movement that exist within the West Bank. I take the period since January 2006. An average of 508 different types of obstacles, which the committee I am sure will come across in their travels next week, exist throughout the West Bank. By that I do not mean the actual perimeter of the West Bank, i.e. the crossing between the West Bank and Israel; I mean from one part to the other. I know that my colleague from the Quakers and the EAPPI[1] talked a lot more about that in their submission, but that, in terms of development and frustration of the development of a viable economy, is absolutely critical. It is less difficult to understand the security paradigm, if you like, in terms of crossings from the West Bank or Palestinian territory into Israel when actually what you are talking about is from one Palestinian village to another.

Q144 Chairman: I think, in the context of Gaza, in one of the submissions somebody did say that the border crossing was closed most of the time and if the Israeli authority are controlling the airport and controlling the sea access, effectively living in Gaza is like living in an open air prison. Obviously in the long term that is unsustainable, not least because you cannot have an economy in that situation any more than you can have an economy in a prison.

Mr Leach: May I add to the amplification of the answer to this question about restrictions on Gaza? I would like to draw the committee's explicit attention to the points that Oxfam makes in our submission on page 13 under "International Trade" and the structural obstacles to security, the economic obstacles, that exist. It is not just about closures, which you might say are a temporal thing, although they have been in for prolonged periods and therefore are not temporary, but I think just as worrying are the structural arrangements for impeding the export of Palestinian goods from Gaza, which of course is having direct impacts on household security. These impediments are well set out, so I will not cite them here, but I do want to draw attention to them because I think, again rather like the earlier point about not deflecting attention and addressing your invocation, Chairman, to be practical, we need to see real advances in changes in the arrangements by which people can make a living. Part of that is restriction of movement but it is also that freedom of movement.

Q145 John Bercow: Evidence from the Board of Deputies says that the Government of Israel is committed to providing humanitarian assistance to Palestinians in the West Bank and in Gaza. I wonder if Mr Grunwald could tell the committee how much such assistance has been provided by the Government of Israel since January of this year?

Mr Grunwald: Let me preface that answer in this way: I cannot speak for the Government of Israel; I speak for the British Jewish community. There have been several questions that have cropped up today which might be better if they were directed at somebody who is here to represent Israel rather than the British Jewish community. Having said that, again our understanding is that there have been and will be many projects which will be of tremendous humanitarian assistance - potential humanitarian assistance - to the West Bank that the Israeli Government either has been involved in or would be prepared to be involved in if it had a partner with whom it could act and talk. I understand that there are, for example, in the planning stage, projects for desalination plants which would be of tremendous benefit not just to the Palestinians but to Israel and, indeed, to the whole area. I am quite sure that Israel would like nothing more than to proceed with those in partnership with a proper Palestinian Authority with whom it could do business for the benefit of all in the area.

Q146 John Bercow: I am interested in that reply, and the Committee will either accept or reject the slap on its collective wrist for the misdirection of questions. I understand the point that you are making but I wonder if, just coming at it again from a slightly different angle, I can probe you on something which I have been told, and the veracity of which I have not yet established, and that is whether the Government of Israel has offered, as it is reputed to have done, to supply goods in kind rather than in cash and had that offered rejected. Again, if we are focused in this Committee not on what might be considered a foreign policy analysis of the issues which would fall within the aegis of the Foreign Affairs Select Committee but upon the humanitarian consequences of the present situation, I am bound to say that I should have thought that such an offer would be worthwhile and its rejection would, at the very least, be questionable.

Mr Grunwald: I refer again (and this sounds like something from - I do not know if it is an American series or not: "I refer to the answer I gave in Prime Minister's question time") to the answer I gave before.

Q147 Chairman: I take the point, but the answer you gave before related to, as you put it, some of the revenue that was effectively the Palestinian Authority's revenue. What Mr Bercow is saying is that a direct offer from the Israeli Government, from its own resources, in kind, has that or would that help? There is a difference.

Mr Grunwald: There is a difference, although the principle behind any refusal may be the same. I am happy to make a specific inquiry and come back to you with an answer on that as well.

John Bercow: I am very interested in that point so I would be most grateful for that, although if other colleagues on the panel particularly want to respond to that question here I would be very interested to hear. I have to say, Chairman, I do regard it as quite an important matter if an offer of direct provision of services or goods is made and is rejected. It does, at the very least, open up the question as to how sincere is the motivation of those doing the rejecting and how anxious they are, actually, to receive the goods.

Chairman: If I can be even more frank, from the Chair, the concern one has is that the situation is deteriorating, the international community is diverting increasing amounts of resources, somewhat ineffectually but at least trying to do it, and, to put it at its bluntest, the Government of Israel is not contributing at all. I think that does stand out as a rather stark contrast. What I am saying is it would be good to have some indication of what the Government of Israel's position is on that, and whether they are trying or would try to or wish to, would help the understanding of the situation. As you will appreciate, it does look very stark.

Q148 John Bercow: At this stage we do not have an answer to this question, but I do think we need an answer, to be honest, from Mr Grunwald and, possibly, from other witnesses.

Mr Leach: If I may, I think we would like to come back on that question because I think it is an important one in terms of Israel's obligations under the Geneva Conventions for supporting the needs of the civilian population.

Q149 Chairman: That gets us into another area, which I might pursue briefly. One of the difficulties is that the Palestinian Authority itself is a slightly odd body. In the article we had from Mandy Turner she said that: " ... the main problem of the Palestinian Authority was that it was not set up to deliver democracy to the Palestinians but to deliver security to Israel." We are left with a situation where, in any case, the Palestinian Authority is now controlled by Hamas but the Government of Israel and, at the moment, the international community will not recognise it, for reasons we know. The problem we are then left with is where is the civil society, which is the normal fallback position in any developing situation, whether it is for development or building democracy, or what have you; strengthening civil society is one of the standards. One of the problems we have is that DFID does have a civil society programme and does give support. We have had evidence from NGO Monitor that is concerned that money is going, effectively, to civil society organisations that (and I quote): "DFID funds are ... filtering through to radical Palestinian NGOs whose primary goals are to demonise Israel". That is their perspective. I think the question we are really working is where are the moderate democratic civil society organisations or how can the international institutions work to try and create these? Apparently, on the information we have, they do not really exist.

Mr Bell: Can I kick off on that one? I think it is perhaps important, before one goes any further, to define what one means by a "radical" organisation. I would suggest, being very familiar with the NGO Monitor, that "radical" can mean organisations that are critical (and I agree sometimes very strongly) of Israel. We, as Christian Aid, as a partner organisation, engage a great deal with civil society. Many of the organisations with which we engage, both Palestinian and Israeli, are indeed critical of Israel. The reason that they are critical of Israel is because they see that the actions of the Israeli Government - successive Israeli Governments - have been to undermine and frustrate Palestinian development and the development of a viable Palestinian economy. That has been as a result of Israel's settlement programme, the route of the separation barrier, or wall, through the West Bank and frequent closures and frustration of movement within the territories. It is understandable, in that context, that civil societies, be they health developers or educational organisations or agricultural organisations, and indeed human rights organisations, are going to point to Israel, in terms of its policies (not as a state per se but its policies) as part of the problem - indeed, as many of them will also be extremely critical of the Palestinian Authority in terms of it having been part of the problem. In a sense, it comes back to what is the responsibility of outside actors, such as DFID. The responsibility has to be to build up and strengthen both Palestinian civil society and the government - civil society in terms of that arm of Palestinian society that will hold to account the actual government that they have. At the moment Palestinian civil society and certainly those who are less engaged in civil society-type activities - what I mean is those who are not involved in actual organisations - will look at the situation in terms of democracy, and democracy, I think we all accept, does not just mean turning up at the ballot box and having a free and fair election, although, obviously, that is an important component. As we said in our evidence, democratic principles go far beyond that; it talks about accountability and the non-use of violence as a way of solving problems. The Palestinian Government has got some way to go in those areas. If the Palestinian population can look at the situation in the West Bank and in East Jerusalem and see their lives being made more and more difficult as a result of Israeli land acquisitions for the expansion of territories and an international community that is prepared to allow that to go ahead with impunity and not hold Israel to account under its obligations in the Geneva Convention then they are going to question democracy as a way forward for them as a people. So I think DFID has a very important role to play in terms of civil society, and the way in which it engages in a democratic future, which need go far beyond purely elections.

Q150 Chairman: I can accept that entirely, and I have read the NGO Monitor's evidence in full and I did not agree with all of it or indeed where they were coming from. Nevertheless, they make one or two quite acerbic points which need to be addressed, one of which you may discount. They say, first of all, that occasionally (and they identify Christian Aid explicitly) they lack sensitivity in the complexities of the situation and that, in addition to that (and this is a quote) " ... lack the necessary language and access to work independently. Instead, they rely on local teams to show them around and to 'find' the right people to 'confirm' particular versions of events." The question which then arises - whether it is Christian Aid, Oxfam or DFID for that matter - is: what steps are you taking to ensure that the people you are working with on the ground are people who have what you might call a constructive engagement in civil society rather than (to put it in the language of the Israeli Government) potential agents of terror? In other words, how rigorous are you in trying to ensure that the people you are working with, who may be frustrated, dissatisfied and attacking the policies but, nevertheless, have a positive, civic objective as opposed to being potentially or actually engaged in planning acts of terror? It is a serious point, and for us if DFID money is going into organisations of that kind it is important that we know that the checks are there.

Mr Bell: Christian Aid is rigorous in the sense that it approaches partnership, not just in the question of the Palestinian Territories and the Middle East but worldwide. Partnership is there in order to promote change in order to address the issue of poverty, and, indeed, the causes of poverty. We are satisfied that the partnerships that we hold with Palestinian and Israeli organisations, although we would not pretend, as we would not anywhere else in the world, that we would agree with every single word uttered by those organisations, or indeed always share their analysis (as an independent organisation we are capable of coming to our own conclusions and developing our own analysis - having said that, of course, we are rooted in the experiences of those partnerships) we are satisfied that the partnerships we are engaged with and that we support are there to promote change for the benefit of all.

Mr Leach: I want to make a number of remarks which I hope address your question accurately. The first is the assumption behind the question that civil society somehow is a substitute or can step in when institutions do not function; I think we just have to be careful about that. To repeat the point that I have already made, so I will not repeat at length, however imperfect or short-term the Palestinian Authority was in conception it, nevertheless, was an established set of institutions designed to engage with ordinary people - people, in other words, in civil society. Turning to the issue about civil society I think there are questions about the scope for involvement because of the circumstances. If we are precise about what we mean by "civil society" then we should talk about civil society organisations, and then we can tell you at greater length about the practical difficulties which civil society organisations in the Palestinian context are facing, and I would agree with Christian Aid's points about the need for DFID to support efforts to foster a framework in which such organisations can exist. Turning to your subsequent question about how can we be sure, I think it is important to explain why we are there. This is not a conventional development situation and it is important that we talk about this, as we have tried to do this morning, in terms of the political circumstances and recognise the full significance of that. Speaking for Oxfam, we have worked in the situation now, as I said at the outset, for a long time. Your question suggests that somehow we have to make windows into man's hearts, which is not something that we will do with very much ease or with very much certainty. We employ people from Israel, from the West Bank, in Gaza; most of our staff in that situation are therefore from the region. We are clear with people that they, in working for an international organisation and working as civil society representatives, have obligations to ordinary people. That is and must be their foremost concern and our commitment. I also want to give evidence that we work with civil society in both societies. It is an important point to add here, in talking about working with civil society organisations, that we do not limit it just to working with Palestinian organisations but that the Committee understands we are working with people in Israeli society too, because of a fundamental commitment in development practice to listen to ordinary people.

Q151 Chairman: A final comment on that point: DFID tell us that in spite of the funding for civil society, which implies a difference of view as to what they think the role of civil society is, a moderate, democratic and secular political alternative to Hamas and Fatah has not emerged. You, obviously, Mr Leach, have said: "Anyway, civil society is not there as a substitute for the Authority", but is it actually realistic to assume that a viable Palestinian secular society, civic society, can function - allowing for the difficulties?

Mr Grunwald: Mr Chairman, can I just come in on that very briefly. We have had meetings with various organisations and people from both sides. I would commend to you - and I do not know if you will have time for this in your trip to Israel - an organisation called One Voice, which may be known to some round this table, which is a grassroots organisation working with individual Israelis and Palestinians who sign up, effectively, just to talk to each other and get to know each other. That, of course, is the foundation of what could turn into proper civil society within a Palestinian State. I would suggest that if you could find time in your trip next week to meet them that might be very productive in terms of an organisation that you might want to recommend that DFID should look on favourably. There are others in many areas; there is an organisation called Playing for Peace involving basketball players from Israel and Palestinian - anything which brings people from both sides together in a positive way. These are organisations which we would suggest ought to be supported and promoted.

Chairman: Clearly there is a difference of view between the roles of civil society. I think, frankly, you are right. My instincts are you cannot use civil society as a substitute for government, which makes me wonder whether DFID are down the wrong track.

Q152 Richard Burden: Can we return to movement and access issues, but this time looking at the West Bank? The Quaker Peace and Social Witness evidence states very clearly that the situation with regard to movement and access in the Occupied Territories, both Gaza and the West Bank, has not improved. Mr Bell for Christian Aid mentioned a little earlier on that there are over 500 checkpoints and obstacles to movement within the West Bank, and in fact the United Nations OCHA record that is up 40 % in the last year. Again, I am a little struck by the apparent contradiction in evidence there because when I was asking you some questions earlier on, Mr Grunwald, you said that your evidence saying that Israel has continued to implement the measures it set out in the post-Sharm El-Sheikh agreement, the humanitarian plan, applied to both the West Bank and Gaza. We have discussed Gaza and access in and out of there but I wonder if you could let us know what, in practical terms, Israel has been doing to implement those provisions, both in terms of access from the West Bank into Israel and, also, access within different parts of the West Bank.

Mr Grunwald: I am not sure that I will be able to go into a tremendous amount of detail over and above what we provided in the submission that we made. In terms of movement, I suppose you are really asking me, are you not, questions to do with the separation barrier? Is that what underlies your question?

Q153 Richard Burden: No, it is actually the other way round. Your evidence is stating that Israel is continuing to implement the provisions of the Sharm El-Sheikh plan. I am not saying what are they doing; it actually goes contrary to that; I am saying that that evidence must be based on some acknowledgement that Israel is doing something in the West Bank to implement that plan. I am just asking what are they going to implement in the West Bank?

Mr Grunwald: Again, my understanding is that wherever security makes it possible restrictions on movement are eased. Infrastructure has been built to try to ensure that access can take place if there have been instances of villages, or parts of villages, that have been cut off; infrastructure has been built to ensure that access can be maintained from one part of a village to another or to lands where work is being done. However, any of the movements to ensure that Palestinians can freely move within the areas (I am sorry to come back to it - although I should not apologise for doing it) are all dependent on the security situation. I would suggest that since there has been a reduction in tension between parts of the West Bank and Israel proper as a result of the reduction in successful terror attacks that have come from the West Bank into Israel proper, that in fact there has been improvement in movement within the West Bank simply because there is less Israeli reaction to successful terror attacks than there was in the past. I do not know that I can be more specific than that.

Q154 Richard Burden: How does that square with the fact that the obstacles have gone up not down? Have the number of terror attacks in the last year gone up or have they gone down in the West Bank?

Mr Grunwald: I think you know very well they have gone down.

Q155 Richard Burden: But the obstacles have gone up.

Mr Grunwald: They have gone down, and I am sure everyone hopes they will continue to go down, partly because the restrictions that have been imposed are for security reasons.

Q156 Richard Burden: In relation to Jerusalem, is it true that if you are a Palestinian with a West Bank identity card the only way you can travel into Jerusalem at all these days is if you actually work for an international organisation?

Mr Grunwald: I am not in a position to give you an answer to that.

Q157 Richard Burden: If I can turn to the Quaker Peace and Social Witness, Christian Aid and Oxfam, you have all been fairly critical about movement and access through Israeli checkpoints. What do you think should happen? How could movement and access through checkpoints be improved?

Ms Karanasou: We do not feel that the answer to this problem is building terminals, trying to mechanise the procedure and trying to minimise the contact between Israeli soldiers and Palestinian civilians. We are aware that a lot of funding has gone into building infrastructure at some checkpoints, particularly the ones giving access to Jerusalem, but we do not feel that that is the answer to the problem. Problems continue to persist at these checkpoints; people still can only approach the checkpoints if they have got permits, and getting permits from the Israeli authorities is highly problematic. It is not a transparent process; people are denied permits on security grounds but they have no means of appealing against decisions or knowing what the reasons behind them are. Also, there are costs involved in trying to get permits; permits are short-term and they have to be renewed and they can be withdrawn at any time; permits can also be overruled by any kind of closure that is declared at any time. So you may have a permit to enter Jerusalem, go to a checkpoint and not be able to go through anyway because some other kind of rule has applied at that time. We feel that the answer lies in removing this restriction of movement, at least within the Occupied Territories themselves, and for pressure to be put on the Israeli Government by the UK Government to implement the ruling of the International Court of Justice in relation to the barrier. We feel that this is the answer, not to try to sanitise, perhaps, the restrictions on movement.

Mr Leach: Can I add to the answer? We need to ask ourselves two fundamental questions, or at least I would encourage the Committee to reflect on these. The first is why do the checkpoints exist and why do they continue to exist? That takes us directly to the existence of the settlements, and I think that needs more reflection. The other issue that needs review is the issue about security. Security is given as the sole reason for the existence of the restrictions, and security for Israelis is vital - there is no question about that from us or from those that we work with. The issue that needs to be considered is what scope is there for economic development. With respect to the West Bank, again, I would like to draw the specific attention of the Committee to what we have said on page 10 about the freedom of movement for goods and the scope for Palestinian farmers and so on to make arrangements. The fact is that the restrictions not only create impediments for people temporarily but, again, they have created a basis on which structural inequity can be developed. It is clear that Israeli farmers have a competitive advantage over their Palestinian counterparts. We know not on the basis of random interviewing but through a process of sustained interviews of economic producers both Israeli and Palestinian that an Israeli trader, for instance, in Zubadat buys vegetables without any consultation with Palestinian farmers about prices - he does not have to, prices are set from outside. So in answer to the question about restrictions I would like to suggest reflection be given to what we have advocated in our submission about the need for support for economic policies which will make a fundamental difference to the security of both peoples.

Q158 John Bercow: A couple of years ago, with Christian Aid, a number of us, including Joan and I, went to Qalqilya and one could not but be struck by the undeniably damaging impact of Israeli policy, including the separation barrier, on the prospects of subsistence there. On the other hand (and this was a point which struck me very forcibly at the time), the one argument to which I did not think in the course of examining the issues Israel's critics had any particularly convincing response was the argument that said that since the construction of the barrier there had been a very, very sharp reduction in the number of insurgent attacks and in their severity and consequences. Therefore, what I am really moved to ask is about the direction of the barrier. It may be that there are people who think that Israel should, to coin a term, unilaterally disarm now. That seems to me to be not only an unrealistic proposition but, also, an entirely unreasonable one. Clearly, any society has the right to defend itself. To my mind, and I should have thought to the minds of quite a lot of people who are not extremists in the dispute between Israel and the Palestinians, there should not be a dispute about the entitlement to construct a barrier thereby to protect yourself if it is done exclusively upon your own land. I wonder whether Mr Grunwald would accept that Israel has, in a sense, Chairman, made a rod for its own back by creating a barrier which manifestly does more than simply protect existing territory and tends, instead (to use that rather hackneyed but valid term in this historical dispute), to create facts on the ground by intruding into territory which, at the very least, could be described as being the subject of disputed ownership.

Mr Grunwald: Thank you for that question, and may I pick up on the language you used about Israel "making a rod for its own back"? I am not here, let me say again, to defend either, in one sense, the existence of the barrier or indeed the route, although I could do one certainly and make comments on the other, and may well do so in the course of my answer. The concept of a rod for your own back indicates that you have created something which is going to cause you an injury. The whole purpose of the erection of the barrier was to prevent injury being caused to Israelis, not to inflict it on them. I speak as a Jew. The idea for a Jew of anyone having to live behind a wall is an extremely difficult one to stomach. For centuries Jewish communities around the world fought to get themselves out from behind walls that were imposed on them for no good reason: Jews did not spread disease; Jews did not spread the plague - all the reasons that were given for forcing Jews behind walls. This Committee must understand that the difficult debate that took place in Israel when the question of a barrier was first mooted, the only purpose of it has been to prevent the suicide bombings and the terror attacks that took place inside Israel. That is not a "rod for it's own back": that was to prevent its own back from being smitten and it succeeded. It has succeeded enormously. The number of successful attacks has reduced phenomenally. The number of deaths caused by terror attacks within Israel has reduced incredibly. Year by year it has come down and in 2002 there were 453 victims; last year I think it was down to 45 from terror attacks within Israel. The number of attempted attacks has not gone down by the same extent. They continue, and they continue to this day. A small part of the wall, as you know, in certain areas is something between 3-5 per cent of it - people's views of the barrier have changed. I was very intrigued to note that only last week the French Foreign Minister, once having been very opposed to the erection of the barrier, changed his views on the matter. "Although the wall was a moral and ethical problem for me, when I realised that terror attacks were reduced by 80 % in the areas where it was erected I understood I did not have the right to think that way". The fact is that it has worked.

Q159 Chairman: Mr Grunwald, I think you have given a perfectly eloquent response on that, but Mr Bercow's question, and Mr Barrett's follow-up question, is not with the effectiveness of the wall as a security barrier, but I think it is put in our evidence that the wall is twice as long and taller and built on occupied territory; in other words why did you not build a wall down the green line?

Mr Grunwald That is a question which has been asked of the Israelis on many occasions and the answers that they give are two-fold: one, it is, security; and two is, the route of the defence is not final. Please God, when there is peace and, please God, when there is the two-state solution that we all want then negotiations with a partner who is prepared to talk will result not only in the changing of the route of the wall but also, please God, in its dismantling completely.

John Bercow: I was fascinated by that very considered and thoughtful reply and I appreciate it, but I do think if I may say so that line of defence from the Government of Israel really amounts to a justification for pursuing a policy which, in a literal sense of the term, is disproportionately draconian so far as what it is required to achieve, the immediate objective of protection. Simply to allow yourselves subsequently the opportunity in the context of a negotiation towards a settlement to say, "We will now relax it" - I suppose what I was suggesting to you, in the politest possible terms, was that Israel was in danger of creating a rod for its own back; not in the sense of inflicting upon itself immediate physical injury, but in the sense that you have given ammunition and succour to the enemies of Israel; because you have, if I can put it this way, opened the Government of Israel up to public obloquy because people feel that instead of simply seeking to preserve life and limb, to protection national security, you have in the process sought to advance a territorial claim. So far as possible, recognising cast-iron distinctions do not exist, one should seek to preserve the distinctness and separateness of the two issues of, security on the one hand, and ultimate solution on the other. I fear Israel's conduct so far has been such perhaps as to muddy the waters.

Chairman: Do you want to respond to that? I think in a sense it was a comment. I think in order to try and complete the session, we have three or four questions actually arising out of that relating to the impact of the separation and the settlements and so forth so I think we can move on to those, otherwise we might overstay our welcome.

Q160 John Barrett: I think we should focus on the economic impact of the Separation Barrier. The Quaker Peace and Social Witness evidence states quite graphically how people have been separated from their land, their olive trees, their citrus trees, their greenhouses and their water supplies. I would have to say, if anybody separated me from my land, my work, my income and my water it may stop me attacking them immediately, but I would have to say the tension would increase; and the long-term impact of that is quite significant. Not only that, the Israeli Government were offering desalination plants, on the one hand, and annexing water on the other hand. What I would like to look at is that long-term economic impact. Where communities have been separated from their income, their water supplies and a whole range of their matters of everyday life, how can those people develop economically, and how can outside agencies have an impact while that barrier is such a permanent fixture? Floresca, your evidence, in the first place, gave the exact village of Jayyous, where it was quite specific about what was happening. This is happening elsewhere, and with the barrier in place and the permanence of that barrier how can people then move on to economic development - and economic development was mentioned by Adam? With that barrier in place in more ways than one, how can that development take place?

Ms Karanasou: With enormous difficulty. I cannot see how development aid could help there. I am not aware of Jayyous receiving any development aid directly. We are aware of great impoverishment because of its proximity to Israel. There was a time when some agricultural produce could be sold in Israel - that stopped being the case several years ago and now it cannot even be sold within the West Bank. It is a constant encroachment on the marketability of the products, as well as losing land and having less land to cultivate and less water, so it is not viable. I just wanted to quote here the President of Supreme Court, Aharon Barak, who is quoted in the B'Tselem report, "Under the Guise of Security", which looks at the barrier and particularly looks at the case of Jayyous because of the expansion of the Israeli settlement Zufin on the seam zone, which is land between the green line and the barrier. He is quoted in the report as saying, "the route of the separation fence severely violates their right of property and their freedom of movement. Their livelihood is severely impaired". Everybody acknowledges it is very, very difficult.

Q161 John Barrett: Markets have been destroyed; and, along with food and water, the basics of life are inaccessible for many. Is that the case?

Ms Karanasou: There is one well left at Jayyous to use, and for their water needs they have to buy water from outside. Their other wells are on the other side of the barrier and they can only use the water from them when they can get access to the land to be cultivated.

Q162 Chairman: Can I ask a nave question. Before the barrier was built were most of the communities reasonably self-sufficient in terms of their own food and survival? If they are no longer self-sufficient, how dependent are they on food aid?

Mr Bell: In general, of the Palestinian population 51 % are reliant on the World Food Programme for food aid, so more than half the population in a country which, as you say, should be able to provide for itself. Can I just add to Floresca's point about the effects of the wall/barrier/fence - it is many things in different places but its effect is the same, or least in some places has a more sinister impact than others. One of the impacts, from villages I have visited up and down where it has severely affected the access of those villages (and primarily these are farmers and therefore are reliant on the land around them) has been to restrict (at best restrict) and at times frustrate completely their access to that land to actually cultivate it, thereby taking away from them their means of livelihood. For some of those villages a very real conversation (and many may think a desperately sad conversation) is, "Should we stay or should we go?" For a number of reasons, especially in the Qalqilia region - and I concur with what Mr Grunwald said - there have been some links made to try and overcome some of the obstacles that the barrier presents; it is what infamously Aariel Sharon referred to as "transportation contiguity", which are tunnels under roads which, yes, they will create a link between villages and towns that have been cut off. For those where that link is not enough, i.e, yes, it is a link between two communities but it is not a link to the land, the question has to be: "How much longer can we actually stay here?" Any development aid that you are talking about would almost need to be talked about in terms of literally cash injections to help people stay where they are, but not in terms of increasing productivity.

Mr Leach: I wanted to add another point about the importance of recognising and responding to something you said about being cut off from water. That really is a temporal issue. That is an immediate issue. Human beings cannot for more than three days be without water. On 12 September this year, for instance, settlers attempted to stop an Oxfam water truck entering Suseya village near Hebron by covering the road with metal spikes. These savage interferences with people's rights to water I think do demand urgent attention. To answer your question, I think it is very difficult to see how long-term development can happen.

Q163 John Battle: If I could return to the high level of bombings and killings and I want to focus on the Quaker Peace and Social Witness evidence because, as I understand it, you have got observers at key flashpoints around the place in the West Bank. You say in your evidence that not only have your observers been attacked by settlers, you also say that Palestinians have been on the receiving end of violent attacks by Israeli settlers. You went on to say that reports have been investigated. I wonder if you could say a bit more about that. I know more of the work, for example, in Latin American countries and the Peace Brigades who push very hard to protect communities from violence and insist on basic human rights and insistent that there is not impunity. Could you say a little bit more about that and perhaps give us some context of how widespread that violence is; how many observers you have; and, perhaps linking into Adam's point, how destructive is it to people's ability to simply live?

Ms Karanasou: At any one time the programme has between 15 and 30 people on the ground, and they are spread around five different locations. All of these locations are in the West Bank and the team that is based in Jerusalem is primarily focussed on supporting Israeli peace groups. This is a small presence and there are probably another 30 or 40 people doing similar work from other organisations. It is a very small presence nonetheless, which is why we have been advocating for inter-governmental bodies to take over the role of providing protection to civilians and human rights observation, which is reported in Early Day Motion 596, which some of you on this Committee have signed, which over 160 MPs have now signed. In our evidence we talk quite specifically about Yanoun. It is a tiny village, broken up into two parts - upper and lower Yanoun - and about 100 people live there. Since 2002 Yanoun has had a number of incidents of attacks and harassment from hard-line Israeli settlers who live in an outpost very near Yanoun, which is part of the Itamar settlement. In the autumn of 2002, while Palestinians of Yanoun were harvesting, a man was killed by settlers. To our knowledge there has not been any prosecution for that. There has not been any prosecution for any of the other attacks, except for one case that went forward over one attack against two Palestinians. In the end, several months ago the case was thrown out of court because there was not sufficient evidence to prosecute the man. This is what we mean about impunity.

Q164 John Battle: Could you give us an example? How widespread would your evidence say that the problem is? Is it just isolated incidents in certain intense places, or is it quite widespread across the West Bank with settlers, the impact of settler communities?

Ms Karanasou: We think it is quite widespread. I am not aware of cases in our parts of the West Bank where there have been prosecutions and successful ones. Certainly all the attacks that we are aware of having taken place against international observers in Hebron have not been followed through, and there have been no prosecutions, even when some evidence has been provided, such as photographs. We, and the World Council of Churches who are involved in the international coordination of a programme, wrote to the Israeli authorities about these attacks but we never actually received a reply. Perhaps organisations like Amnesty International might be able to give this overview much more accurately than I can.

Chairman: Thank you. The other issue with settlers is that they are producing products which are going through Palestinian territories. Joan Ruddock has some questions.

Q165 Joan Ruddock: These products are marketed under the Association Agreement between Israel and the EU which, of course, gives duty preferences to Israeli products. I think it is Christian Aid who are saying that in a sense the UK and EU are complicit in promoting the marketing of these goods as "Made in Israel", when effectively they are made in illegal settlements; and that this is an arrangement of benefit to Israel which will not be justified - that is the position of Christian Aid. I just wonder what measures you think that the EU should take to prevent products originating in settlements being designated as "Made in Israel". We do know there is now a postcode edition that is recent, but as far as consumers are concerned "Made in Israel" is "Made in Israel".

Mr Bell: If I could preface the answer with why it is that we see this as an important issue to address. It is not "let's find another way to hamper Israel"; it is for a very, very critical reason, and it is a critical reason for this Government and other governments that have a relationship with both communities, and it is one of objectivity. If you have a situation where your aid-giving arm of government determines that one of the reasons you actually need to give aid is as a result of an occupation and all that goes with that (and we do not need to go into it here - the settlement infrastructure), if that is one of the causes - not the only cause but one of the causes that has necessitated the need for aid to Palestinian communities - it seems ironic, if not disingenuous, that another arm of government, in this case the Department of Trade and Industry and through our relationship with the European Union, is in a sense rewarding those settlement communities by allowing them to trade, as Ms Ruddock says, as part of Israel, and therefore benefiting from a tariff-free trade status. I accept that there was an agreement made by the current Prime Minister in a previous position on that agreement which did, as correctly stated, enforce that Israel include a postcode which therefore relies on customs officers knowing where all the postcodes refer to in Israel and the Occupied Territories. As of yet I am unaware that the mechanism has actually been tested to see how affective it has actually been in preventing what the EU acknowledges preventing, an illegal use of the Association Agreement. For us it is about demonstrating joined-up government. It is about demonstrating objectivity - that as an outside actor we will deal with both parties in order to further the interests of peace, which will be of interest to both parties. We will deal with both parties objectively without partiality. We are not going to create a moral equivalent of actions by either party; but we will deal with actions by both parties which are detrimental to peace as we find them and as they affect any progress towards peace. That is the reason why I know Christian Aid has addressed this issue. I hope that goes some way to answering your question.

Q166 Joan Ruddock: If I could just follow-up and ask you, to what extent do you think that the Association Agreement between the EU and Israel has any benefit to Palestinians?

Mr Bell: That is a difficult one to measure. Again, let me preface the answer: the EU has attempted to develop a similar type of relationship. As part of the Barcelona Process of developing relations with all of the Mediterranean rim countries with the European Union, in order to promote trade but also positive relationships between the regions, it has also attempted to do that with the PLO as a representative of the Palestinian people. In reality that agreement has not taken effect, partly because of the difficulty of actually Palestinians reaching any markets both internal and external. In terms of what impact Israel's EU agreement has had on Palestinians, it is as much about what it demonstrates in terms of political intent, as it does in terms of the impact it has on them economically. It could be argued that there would be some benefits if, for example, companies such as Egretco bought Palestinian products from the Occupied Territories and then sold them on. That could be seen as positive, but it also means that Palestinians are completely reliant on a middleman, or Israel as its access to the outside world, which I do not think is particularly helpful for the development of its own independent economy.

Q167 Chairman: You say an agreement with the Occupied Territories is not functioning?

Mr Bell: It is de facto effectively suspended because the Palestinians have so little trade with Europe - it is negligible.

Q168 Joan Ruddock: We were told by our Government that both agreements, the EU agreement with Israel and the internal agreement with Palestine, were functioning, but you are quite clear that the Palestinian one is not? It is in place but nothing happens?

Mr Bell: It is in place. There has not been a ruling which says, "Right, this agreement is suspended"; so, in that sense, yes, it is still working. Is it working in reality?; which I think is a more important question in theory. No, it is not.

Mr Leach: The Palestinians are obliged to rely on Israeli intermediaries to transport their goods and, therefore, not pay purchase taxes and customs to the Palestinian authority, which we have been told creates further losses to the economy of 3 per cent of GDP a year.

Q169 Chairman: On another point of clarification, am I right in saying that products produced by Israeli settlers in the West Bank can be accepted under the EU agreement as a product of Israel simply because of the postcode, which the average consumer may or may not be interested in? Because if that is the case, is the EU not complicit really in legitimising settlers?

Mr Bell: It is certainly problematic, yes. It is worth bearing in mind, we have all been to Tescos and Sainsburys and bought our herbs, spices and what-have-you and seen "Made in Israel"; we have no way of knowing which part of Israel that is, and we would not expect to. We would not expect to see "Made in Gambia GU" or whatever - it would not make sense. The postcodes are there for the benefit of customs in order to determine where those products have come from. As I said earlier, that has not been tested yet in terms of whether or not it is having an impact.

Mr Grunwald It really does seem that these last exchanges show just how vital it is that if there is to be any improvement on any of the issues we have discussed today there has to be a political process. A political process depends on there being two sides who can and are prepared to speak to each other. Anything that this Committee can do to ensure that that situation is alleviated can only be to the good; because at the moment the Israelis really have no-one to talk to and that has to change; and, when it does, the situation of the Palestinians itself will undoubtedly improve.

Q170 Chairman: That is a helpful intervention I think which perhaps leads us to the final point. I think you said yourself, Mr Grunwald, that everybody wants a two-state solution. We seem to be further away than we have been for a long time. I think the Prime Minister in evidence before the Liaison Committee of the House, when he was being asked about the Middle East and a reference to Northern Ireland, said a certainly irony is that actually there is a solution to the Middle East problem and there is not one for Ireland - not a recognised one; yet there is a peace process in Ireland but not in the Middle East. The real question is: what are the prospects in this situation for making progress for a two-state solution? On the one hand Israel will say, "Our security is paramount", but the counter to that is you cannot have security just by building fences - there has to be some degree of political agreement and, in that context, people have to be able to make a living. What are the prospects of agreeing, first of all, the territory of the two states, or making any progress at all? Do you have any views?

Mr Leach: My response to the Committee would be, I think that the assumption behind that question is to be re-evaluated. I am not sure what the point of asking us as representatives of international organisations and the British agencies community is. In answer to that question, what I would say is: what are the necessary steps and processes that need to be put in place? I think we would advocate as Oslo 3, first, the resumption of aid to Palestinian institutions which are mandated to deliver assistance to ordinary people, and not their undermining and, therefore, the undermining of essential services. That is a necessary step but it is not the end goal. The second is a reappraisal of this situation, not just in terms of conflict between the Palestinians and Israelis but also in terms of economic justice, or rather injustice; and that there is a need for policies that I have hinted at, and we have hinted at in our submission. The third is about an international conference, not as a displacement activity but as a necessary expression of the will of the international community, given that they have now acted as a player in this conflict by suspending aid, but to explore real measures, insecurity, legality and consistency of application of standards, so that final status issues can be tackled. Everybody knows what the issues are that must be tackled ultimately. I would say those three clear measures are urgent and necessary.

Q171 Chairman: I think this question is directed to some extent at Mr Bell because you did say in your evidence that the obstacle to a two-state solution was the determinant that security had to take precedence over a political solution. I do not think anybody is denying the need for security, and Israel's understanding of that, but I think some of us question whether what tends to happen is, "Our security is paramount, we therefore cannot make progress with political discussion".

Mr Bell: Firstly, I would like to associate very closely with the sentiments just expressed by Mr Grunwald where he said that actually this does demonstrate more than anything else that we need to get a political dialogue which will find a solution to this issue that addresses the needs of all. What do I mean by that? This is not an endorsement or anything else, so please do not take it as such, but let us have a quick look at the road map which has not been mentioned. Within the road map there is an important word which, thus far, has not been defined. I think that has been one of the reasons why we have encountered some of the problems, that there is a viable Palestinian state. I would expect that, in order to take an advanced peace process forward, we need to be very clear what it is that we mean by "a viable Palestinian state", as much as we also need to be very clear what we mean by "a viable Israeli state". I do not think it is fair to talk about one state being viable and not addressing the viability of the other. Both states need to be viable. They need to be politically viable as well as economically viable and that, for Christian Aid, is one of the key questions that has evaded us so far in terms of the international community - genuinely finding a peaceful outcome to this tragic conflict.

Chairman: I think it is fair enough, Mr Leach. We do not expect you to have the answers, but our concern obviously is how we alleviate poverty, how we make progress and also whether it is a bottomless pit of diverting money which could be dealt with properly elsewhere, but you cannot escape this and you are right to remind us of that, Mr Grunwald. Can I thank you all. We obviously are going to have an interesting week next week and I think the evidence you have given us, both in writing and from our own officials, is all helping us to, hopefully, ask some of the right questions on the ground and produce a report which at least will have some constructive suggestions to be made; although we are in the rather depressing situation that it is worse than when we reported three years ago. Thank you all very much indeed.

[1] Ecumenical Accompaniment Programme in Palestine and Israel