July 11, 2005

Israel seeks $2.2 billion from U.S. for pullout

By Dan Williams

JERUSALEM (Reuters) - Israel will ask the United States for
$2.2 billion, one of the largest aid requests by the Jewish
state, to pay for its planned withdrawal from the occupied Gaza
Strip, Israeli political sources said on Monday.

The special funding would be used to pay for the pullout
from Gaza and a corner of the West Bank slated to begin in the
middle of next month, and for the relocation of some 9,000
evacuated Jewish settlers to underpopulated areas of Israel.

Israel is among the largest recipients of U.S. aid, and the
$2.2 billion would be in addition to annual aid of around $2.8
billion. Much of the annual funding comes in the form of grants
that are spent on U.S. military exports.

A senior Israeli political source said the U.S. aid request
was the biggest in recent years, "which is hardly surprising
given the unprecedented scale of the Disengagement Plan."

Israel's Haaretz daily said the request would be made by
aides to Prime Minister Ariel Sharon in talks with U.S.
National Security Council official Elliot Abrams on Monday

The Bush administration has agreed in principle to help
fund the Gaza plan, Haaretz said. Washington wants the
withdrawals to consolidate a five-month-old truce and spur
talks on a U.S.-led "road map" for a Palestinian state
alongside a secure Israel.

The Gaza plan funding would be the biggest U.S. aid package
to Israel since 1992, when Washington paid $3 billion to make
up for damage sustained from Iraqi missile salvoes in the Gulf

When Israel held peace negotiations with Syria and the
Palestinians in 2000, then-Prime Minister Ehud Barak asked the
United States for $20 billion to cover any required Israeli
withdrawals. But the talks stalled and the request was

Sharon casts the pullout as "disengagement" from 4-1/2
years of fighting with the Palestinians. He faces mounting
hostility from rightists who condemn the move as a betrayal of
Jewish claims on biblical land and a reward for a Palestinian


The cost of the Gaza withdrawal, the first time Israel will
have uprooted settlements from occupied land Palestinians want
for a state, is estimated at 8 billion shekels ($1.74 billion).

The Israelis leaving Gaza's 21 settlements and four of 120
West Bank enclaves have been encouraged by the government to
move to the underdeveloped, outlying Galilee and Negev regions.
This will require heavy investment in infrastructure.

"Israel cannot be just a country of disengagement," Deputy
Premier Shimon Peres told Reuters. "We have to engage to
rebuild a country and that is the development of the Negev and
of the Galilee." He declined to discuss the amount of U.S. aid

The government will spread the pullout cost over three
years to keep the national budget deficit from rising

Haaretz quoted government sources as saying the U.S. money
would be for military outlays like relocating army bases and
for developing the Galilee and Negev.

The Palestinians, who were this week promised $3 billion in
aid from the Group of Eight industrialized nations, welcome the
prospect of gaining Gaza but suspect Sharon plans to parlay the
pullback into a permanent hold on much of the West Bank, where
the vast majority of Israel's 240,000 settlers live.

Israel's building of a vast West Bank barrier has further
fueled Palestinian fears. Israel calls the project a bulwark
against Palestinian suicide bombers. Palestinians condemn it as
a land grab, and the World Court has declared it illegal.

Israel on Sunday approved a section of the barrier it said
would separate 55,000 Palestinian residents of Jerusalem from
work, schools and hospitals in the city when it is completed.

The Palestinians, who want Arab East Jerusalem as the
capital of a future state, put the figure of residents who
stand to be cut off by the barrier at about 100,000. Israel
captured East Jerusalem in the 1967 Middle East war and annexed
it in a move not recognized internationally.