Israel Resource Review 11th Febuary, 2005


Arafat's Secret Financial Affairs
Roula Khalaf and Stephen Fidler

Yassir Arafat's triumphant return to Gaza on July 1 1994 heralded an era of hope for Palestinians. Under the interim Oslo accords with Israel, the new Palestinian Authority won a five-year period of self-rule over areas of the West Bank and Gaza.

Arafat also gained control over extensive financial resources. Donor governments pledged $3bn over five years and the authority took over lucrative monopolies and concessions previously run by Israel.

Arafat used an array of financial advisers, strategically placed in various money-making businesses. But he became the most reliant on a worldly Iraqi Kurd, Mohammad Rachid.

The two met in 1978 when Mr Rachid was working on a newspaper backed by the Palestine Liberation Organisation. Later, he became a PLO media adviser, following Arafat to Tunisia when the organisation was expelled from Lebanon in 1982.

Proving useful to Arafat, he gradually became his most trusted financial adviser, controlling hundreds of millions of dollars in Palestinian funds.

An audit of Arafat

More on the FT's investigation into the late Palestinian leader's squandered fortune is role spread beyond finance. Arafat dispatched him to meet Omri Sharon, the influential son of Ariel Sharon, while the Israeli prime minister was still in opposition. Mr Rachid says he has met Omri 13 times at Arafat's request, though denies any business association. Mr Rachid also acted as an unofficial intermediary for Libya in 2003 to bring Britain and the US into talks over abandoning weapons programmes.

Mr Rachid, who also goes by the name of Khaled Salam, had an important advantage in the eyes of the suspicious Arafat: he was not Palestinian so could harbour no political ambitions of his own. "We had the relationship of a father to son," says Mr Rachid in an interview.

Yet his role has put the fast-talking 50-year-old at the centre of the controversy over his boss's financial dealings, earning him the opprobrium of many Palestinians.

Sitting in the lobby of the Carlton Tower hotel in London, dressed in jeans and a white pullover, Mr Rachid says he submitted his resignation as chief executive of the Palestine Investment Fund, the PA's investment vehicle, last July because he became convinced that no matter how well he performed, he would be under attack. "You live judged by the perception, not by the reality."

Although he has been setting up his own investment fund and hopes the PA will be a client, he agreed to continue running the PIF for a few months. Friends say he would stay on longer if asked by Mahmoud Abbas, the PA's newly elected president.

By the time they moved to Gaza from Tunis in 1994, Mr Rachid says Arafat had put him in charge of the cement monopoly that the PA had taken over from Israel. But within a year, Arafat became frustrated by Israel's continued control over parts of the PA's income, including VAT and other revenues Israel collected and then transferred.

"That's when he said he wanted a reserve fund. He told me he could not negotiate with Israelis if they controlled his money," says Mr Rachid. "Whether wrong or right, Arafat couldn't be in the situation he was in."

So, in 1995, funds began to be diverted into a special account at Arab Bank in Ramallah. From there, some went to bank accounts abroad, including by 1997 an investment fund managed by Lombard Odier, a Geneva private bank.

Some funds were used by Palestinian Commercial Services Company - a holding company set up and run by Mr Rachid - to buy stakes or enter into partnerships with local companies. Arafat was generous with those who managed money for him, giving them a percentage of the profits. Mr Rachid says Arafat offered him 10 per cent of PCSC's profits but he declined to exercise this right.

At first, Arafat demanded a reserve fund of $200m. But according to the International Monetary Fund, revenues from monopolies - as well as from taxes on tobacco, alcohol and petroleum - were between 1995 and 2000 also transferred to accounts under the control of Arafat and Mr Rachid. In total, the Fund estimates, the amounts diverted from the official budget from 1995 until 2000, when the diversions stopped, may have exceeded $898m.

IMF officials say $799m was returned to the PA, with the difference accounted for by investment losses.

Israel, the US and European Union were aware that funds were being diverted but, according to one international financial official, "it wasn't politically correct to raise the issue". The mood changed decisively only after 2000 when Arafat was accused of supporting violence.

Armin Laschet, a German member of the European parliament who has investigated Palestinian finances, says: "Everybody knew that Arafat was corrupt. But this was accepted by Israel, the US and the EU as long as he was helpful to the peace process and stopped terrorism. This changed in 2000."

The IMF later questioned the financial strategy. "Since there was neither transparency nor accountability surrounding these investments, one may surmise that the only strategy was to build up equity with little regard to risk," it said in a 2003 report.

Arafat also developed sources of income from a small clique of officials strategically installed in other institutions and companies. Not all the funds collected through these bodies were captured by the IMF's estimates.

In the Gaza Strip, several people directly associated with Arafat - including Hashem Abu al-Nada, who worked in the president's office and was a director general at the ministry of finance - started Al-Baher ("The Sea") Company.

Described by one Palestinian official as a company involved in everything from software to belly dancing, Al-Baher was a private concern that is said to have provided Arafat with direct income.

Arafat often made investment decisions with the aim of buying political favours. Involving Israelis with good political connections appears to have been a priority.

In 1996, for example, Israel gave control of $150m of Gaza pension fund money back to the Palestinians. Arafat took the advice of Jacques Neria, an Israeli historian with no financial background, and agreed for the $150m, now with Credit Suisse in Switzerland, to be managed by Belesta, a Geneva-run financial adviser. The arrangement, however, lasted only a year.

One of the partners in Belesta was Aron Gilon, an Israeli friend of Mr Neria. "We had the advantage of being Israeli and that made it easier for the Palestinians to get money out of the Israeli government," says Mr Gilon, who acknowledges that his firm did not handle other pension funds.

But perhaps the most curious financial relationship developed by Arafat was with Yossi Ginnosar, a former senior official in Israel's Shin Bet security services, who acted as a secret envoy to the Palestinians for successive Labour prime ministers. When Ginnosar died in January 2004, Arafat praised him as "devoted to peace and security".

Ginnosar's death, however, did not lay to rest allegations that he had been paid millions of dollarsto oversee Arafat's Swiss bank accounts. The FT has confirmed from Israeli, Swiss and Palestinian sources that Ginnosar opened the door of respectable Swiss institutions for Arafat and, with the help of Uzrad Lew, a young former Israeli intelligence officer, had overseen a more than $200m account managed by Lombard Odier.

Arafat was seeking respectability for the Palestinians and only an Israeli could open the way to Swiss financial institutions.

In addition to Lombard Odier, Palestinian funds in the mid-1990s were also briefly managed by the London-based Atlas Capital Management and the Swiss-based Soditic Investments. The two later merged.

According to Palestinian officials, Arafat also believed that a partnership with Ginnosar would influence the advice he gave the Israeli government on the peace process.

"After Oslo, Arafat wanted investments that were more stable and credible. Rachid used to say: 'This is our reserve account.' He'd say: 'One day we may need this money.' He bragged about the Lombard Odier account," Mr Lew recalls.

According to documents seen by the FT, the Palestinians deposited about $230m between 1997 and 2000 in an investment account at Lombard Odier. The account, according to Mr Lew, peaked at about $300m, a figure disputed by Mr Rachid. But when the account was closed in December 2001, the Palestinians had earned a meagre capital gain of less than $10m on their investment.

Negotiations to open the account were carried out in 1997 with Richard de Tscharner, one of the bank's 12 managing partners. The two sides agreed that no proceeds from the account - first called Ledbury but changed in 2000 to the name Crouper - could be directed to "any war or aggression oriented activities".

The Swiss bank ended its relationship, more than a year after the outbreak of the Palestinian intifada, citing concerns that the PA could become, in US eyes, an organisation supporting terrorism.

The Lombard Odier account has been controversial because Mr Lew, Sar's partner, has alleged that the bank had colluded with Mr Rachid to allow funds to be transferred to unknown destinations.

Mr Lew clashed with Mr Ginnosar over finances in late 1999 and has since charged that funds in the Lombard Odier account may have been used by Arafat to finance terrorism.

Mr Lew bases his allegations in part on the transfer of $65m in August 2001 to a London bank. He also points to the fact that Lombard Odier's letter of engagement was changed in 2000 to broaden the group of banks allowed to receive funds from the account.

Mr Lew also says commissions were paid to accounts held by Mr Rachid and Ginnosar in Lombard Odier, a conflict of interest. According to documents seen by the FT, Cornflower, one of the accounts Mr Lew says the two men held, earned some $1.9m in commissions in just 13 months from October 2000. Mr Lew says the commissions over four years were significantly larger.

Both the bank and Mr Rachid vehemently deny the charges, saying all the funds went to legitimate institutions or investments. "Throughout the course of this relationship, the bank fully complied with relevant regulations," said the bank, which after a 2002 merger is now called Lombard Odier Darier Hentsch.

The funds "were managed on a conservative basis in diversified vehicles, mainly in the equity market", it said.

Mr Rachid has shown the FT documents indicating the $65m transfer was made to Chase Manhattan Bank and then invested. Mr Rachid says the letter of engagement was changed only to respond to Arafat's concerns about the impact of Israeli incursions on banks in Palestine and to avoid becoming "hostage" to Lombard Odier.

He also insists that he was not associated with Cornflower and that he received no personal benefits from the Swiss investments. He says a personal remuneration arrangement had been put in place for him in 1994 but that the benefits were given to the PA when all overseas bank accounts were consolidated in 2002.

The Lombard Odier account was the largest but not the only Palestinian overseas investment. The FT has learnt that there were at least two other accounts worth around $50m, one of which was with a Geneva affiliate of Lebanon's Banque Audi. The other, called Super-a-Din, was managed by Soditic.

The closure of the Lombard Odier account came at a time when the Palestinians had other reasons to change financial strategy. Palestinian investments in high-technology companies, including through the California-based Canaan Partners, suffered in stock market falls.

Arafat felt his assets in the west were also vulnerable to a freeze after the launch in September 2000 of the Palestinian intifada, which convinced the US that he was supporting terrorism.

The Palestinian economy went into steep decline, shattering companies in which the PA held stakes and shrinking PA budget revenues. In January 2001, Israel also suspended transfers of tax revenues to the PA.

Mr Rachid started to shift funds towards the Middle East and particularly into Orascom Telecom, owner and operator of mobile GSM networks across the Middle East and farther afield. Most Ledbury/Crouper money, and more, was invested in the holding company and several subsidiaries.

A highly speculative investment for which Mr Rachid faced bitter criticism in the Palestinian territories, it has turned out to be perhaps Arafat's single most lucrative deal.

Meanwhile, domestic and international pressure had grown on a reluctant Arafat to clean up the PA's accounts and bring all spending and investment under the finance ministry.

To reassure international donors, then pouring about $1bn a year into the PA, the Palestinian Transparency and Accountability project was launched in 2000. It was run by the US-based Democracy Council, whose head, Jim Prince, had been a director of the investigative arm at PwC, the accountancy firm.

Delayed by the violence, the project was revived in August 2002, when Mr Arafat appointed Salam Fayyad as finance minister. A 53-year-old US-educated economist, Mr Fayyad was uniquely acquainted with Palestinian finances, having been appointed in 1996 as the resident IMF representative in the West Bank and Gaza, then becoming regional manager of Arab Bank's Palestinian arm, the PA's main banker.

The project set out to consolidate PA commercial and investment activities under a single entity, the new Palestine Investment Fund. The Democracy Council first had to identify the assets, including the bank accounts, before Standard & Poor's, the rating agency, assessed their value.

Mr Fayyad says that the bulk of the money diverted from the budget - including all the Swiss bank accounts - was either given back or invested in companies that became part of the PIF, an assertion backed by the IMF.

"No one has come to tell me you missed something after nearly two years, and despite the huge international interest in the file," he says. "You'd think somebody out there would be very eager to say something. But with the passage of time my dence about this rose."

One person familiar with the Democracy Council investigation says, however, that two "pots" of money were not captured by the PIF. One was Al-Baher.

The other was from illegal charges levied by security forces at Gaza's border with Israel, from which Arafat is said to have received a cut. Mr Fayyad says Al-Baher is now defunct and that the border money is from corruption and cannot be confused with the PIF.

Azmi Shueibi, the head of the economics committee in the Palestinian Legislative Council, says his own enquiries suggest that other assets were not consolidated into the PIF. The investigation that led to the formation of the PIF, he points out, was a co-operative effort. He suspects therefore that Arafat and Mr Rachid may have been selective in what they revealed.

"After the death of Arafat it will be easier for people now to come forward," says Mr Shueibi.

Mr Shueibi estimates that the funds diverted from the budget exceeded $1bn and that assets, including buildings, bought with some of these funds are in the name of people selected by Arafat.

He and other legislators say Mr Abbas will have to launch new nvestigations to clear up the questions about Arafat's money, though an inquiry will probably have to wait until after the summer legislative elections.

In an effort to draw a line under the controversy of the Swiss accounts the PA has asked an international accounting firm to compile information for a report expected to be published in coming weeks.

But officials and legislators say Palestinians will believe that radical action has been taken only if Mr Abbas staffs a new cabinet with people with a reputation for honesty. Above all, they say, those responsible for corruption must stand trial. "Perceptions of impropriety can be as dangerous as impropriety," says Mr Fayyad. "Maybe people will feel better if someone is prosecuted. In my book there's no statute of limitations on this."

Telecoms investment brings rewards

Orascom Telecom is one of the Middle East's most prominent companies - an Egyptian mobile phone operator that has expanded into other parts of the region as well as Africa and the Indian sub-continent. Less well known is that Yassir Arafathelped rescue it from financial difficulty in 2001, investing in the holding company and three subsidiaries. Orascom repaid his confidence by becoming a financial success story.

Mohamad Rachid, Arafat's financial adviser, says Orascom's attraction was partly because it had Naguib Sawiris as its chief. "Naguib is bright, energetic, his vision was to create a giant in the Middle East and North Africa," he says. "I believe in the person first and then the company."

But when Mr Rachid first proposed putting money into Orascom Telecom Holding (OTH) - which is listed on the Cairo stock exchange and in London through global depositary receipts - other Palestinian officials were alarmed by the state of the company's finances and complained to Arafat. In the Palestinian Legislative Council, Mr Rachid was alleged to be squandering public funds.

"It was risky: the company was heavily indebted," says one Arab banker. "At the time, nobody wanted to touch Orascom."

Orascom's expansion had taken a heavy toll on its balance sheet. Consolidated financial statements for 2001 show it had lost EŁ435m ($102.1m) on EŁ3.9bn in revenues. Orascom Telecom Holding was saddled with debt of EŁ10bn, almost four times its equity. The price of its GDRs started dipping in January 2001, reaching $0.63 in November 2002.

But Mr Rachid says he knew the company was hugely undervalued and that its stock would rocket if someone lent it money or injected more capital, while it sold a subsidiary.

His first investment in Orascom was about $65m, which went into the company's Algerian subsidiary in 2001. He also invested briefly in Fastlink, the Jordanian network mostly owned by Orascom but sold at the end of 2001. Into Orascom's network in Tunisia, meanwhile, he put $52m. When he proposed investing $60m in the holding company, in the form of a convertible bond, Arafat asked him to reduce it to $20m.

Over the next year, Mr Rachid accumulated more OTH shares and increased his stake in other Orascom ventures. He also made a $35m loan to OTH in 2002.

In all, he poured in more than $200m.

The investment paid off handsomely. A leading Arab banker familiar with the company says the market value of the Algerian and Tunisian investments has doubled. Financial statements for September 2004 show an improved long-term debt to equity ratio of one to one.

The price of an Orascom Telecom Holding GDR, meanwhile, reached $25 in January of this year. The Palestinians' remaining stake - 11m GDRs - is worth a staggering $330m. This is in addition to the realised gains of about $110m from selling shares over the past year.

"I'd love to go down in history as the highest contributor to the Palestinian cause," says Mr Sawiris, now chairman and chief executive of Orascom Telecom. "It is, however, a well deserved gain as the Palestinians put their trust in myself and my company at the start of the story of Orascom Telecom, at times when telecoms companies were under severe strain.",stream=FTSynd,s01=2.html

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Why is the US Throwing Money at Abbas Without Conditions?
Morton A. Klein, National President, ZOA

It's as if the Bush Administration has learned little from the tragic mistakes of the last eleven years of the failed Oslo process. The U.S. is again preparing to provide massive amounts of funds to the Palestinian Authority (PA) without demanding full compliance to the 11 year old Oslo and 2 year old Roadmap. In his recent State of the Union address President Bush proclaimed that he intended to "ask the Congress for $350 million" for the PA. Neither the PA's track record of ignoring, not honoring commitments nor the iron clad proof that much of the past economic assistance was diverted to the terrorist organizations as well as Arafat and his friends has given the White House much pause.

Yet without making this aid contingent on the PA's dismantling and disarming the terrorist networks, ending the incitement in the media and schools, and arresting the Palestinian Arab planners and killers of 1,500 Israelis and 52 a.m.ericans; the US simply throwing money at the PA's dangerous deficiencies will not put an end to the nightmare. Heaping financial aid on an individual like PA President Mahmoud Abbas, before securing fulfillment of the Palestinians' compliance with their basic obligations under the Roadmap sends a strong message that the US is simply not that serious about compliance . And why does President Bush have this confidence in Abbas? Has he forgotten that Mahmoud Abbas was Arafat's top deputy for 40 years, a mastermind of the Munich and Maalot massacres, co-founder of the terror group Fatah, and wrote a Ph.D. thesis and book denying the Holocaust? Would Bush be throwing U.S. money at Saddam's deputy?

In the wake of the Oslo debacle, former President Clinton, his chief negotiator Dennis Ross and pro-Oslo Jewish leaders all now acknowledge that they were tragically mistaken in not demanding strict compliance from the PA of its obligations in each and every stage of the eleven year long process. They realize now that giving unconditional U.S. funds to the PA helped convince them that there was no reason to implement any of the promises they undertook. And yet, with no regard for the past, the U.S. is once again rushing to place the cart of benefits to the PA before the horse of accountability. Is this, we must ask, not simply Oslo redux?

It is remarkable that the apparent motivation for the President's request to Congress to massively increase American aid to the Palestinians, (in an mount four times that provided by the Clinton Administration), is Bush's belief that "peace is within reach." In fact, all the evidence arising from the PA today plainly points to the conclusion that peace is not within reach. Indeed, last week's 45 mortar attacks on Israeli communities and the continuous efforts of Hamas to smuggle suicide bombers through army checkpoints provides proof that the PA is unwilling to do what's necessary to end terror. Let's also not forget that Abbas recently called for "a big Jihad" against "the Zionist enemy" while praising terrorists as "heroes."

The failure of the U.S. to learn from the tragedies of Oslo's more than eleven years of broken Palestinian promises will only help condemn Israelis to remorseless bloodshed. The constant rewarding of the PA with financial contributions and aid packages at every diplomatic juncture has cultivated a culture of non-compliance and corruption which has rightly convinced the Palestinians that they can fund and continue anti-Israeli terrorism with no economic sanctions being imposed upon them. While the Bush administration has embarked upon an international campaign to track the sources of the funds being utilized by terrorist organizations worldwide, it fails to make the connection between aid to the PA and the suicide bombings and rocket attacks on Israeli cities it facilitates.

Before any further concessions are made to the PA it must be held accountable for the unrelenting terrorism being committed against Israel. The mere announcement of a cease-fire by the PA instead of the actual task of battling the bombers should not be cause enough for Washington to start writing aid checks again. As Israeli Foreign Minister Silvan Shalom recently noted: "While the PA is still preserving their infrastructure, the terror organizations can bring about a situation in which time they can carry out a series of terror attacks which will bring down this whole process and send it to hell."

Financial aid to the PA must only be given after their commitments to Oslo and the Roadmap are fulfilled - and not before. The Palestinians must be shown that the so-called cease-fire, which has not even been implemented on their part, cannot become in the words of Hamas leader Khalid Mashal merely "a rest for the warriors." Any economic assistance before these basic requirements are achieved will only reinforce the PA's belief that there is no down-side to their support of the terrorist groups and the U.S. is unwilling to compel the PA to perform. As Winston Churchill, who was no stranger to the political battle against placating evil regimes, once said: "Those who appease the crocodile will simply be eaten last."

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A Hands on Report From the Sharm Summit:
The Cease Fire That Wasn't . . .
David Bedein

Following any negotiation, when the principals do not come out and meet the press at the end of an event, that is an indication that no agreement was reached.

Avi Pazner, acting in his capacity as press spokesman for the Prime Minister of Israel said, "They will declare quiet. They will not sign anything. Sharon will not sign anything. The important thing is the 'quiet.'" He said this to more than 100 reporters who got off the plane at Sharm El Sheikh in the Sinai Peninsula to cover the summit between Israeli Prime Minister Ariel Sharon, Palestinian leader Mahmoud Abbas (a.k.a. Abu Mazen), Jordanian King Abdullah and Egypt's President Mubarak.

"At this summit, we will see calls for a cessation to violence" repeated Gideon Meir, a spokesman from the Israeli Ministry of Foreign Affairs. "There will be no cease-fire proclaimed here today." This was told to reporters as they arrived at an improvised press center established in small villas and tents next to the Movenpick Hotel conference center at Sharm El Sheikh.

In other words, the consistent message in what the official Israeli government spokespeople told the media was a generalized call for an end to violence. However, the summit participants held no press conference. Reporters could not ask the principals at the summit what they meant by an end to violence. Journalists were allowed to follow the summit through video monitors only.

Israeli government officials were quick to point out, during the many hours reporters waited in the press center for a press statement to be released, that the Israeli government expected Abbas to dissolve terrorist organizations and to collect all their weapons, and to arrest any and all wanted terrorists. For this Israel was prepared to make sweeping humanitarian gestures and free more than 500 Palestinians who had been convicted in Israeli courts of law of murder or of attempted murder.

And what if Abbas does not deliver on his promises? Israeli government spokespeople at Sharm could not answer that question.

Israeli government officials were quick to say, however, that Abbas has not arrested or disarmed one single Palestinian terrorist since his election, which took place exactly one month before the Sharm summit.

Israeli government spokespeople did note that Abbas had only ordered that terrorists be "apprehended", and he released the terrorists after their arrest.

Israeli government officials in Sharm did report to the press that there had been a "reduction in Palestinian incitement" in the official Palestinian media.

Indeed, on the previous Sunday, Feburary 8th, Israeli Foreign Minister Sylvan Shalom told the Israeli cabinet that there had even been a "reduction of incitement" in the Friday mosque speeches that were broadcast and telecast on the airwaves of the "Voice of Palestine" network of the Palestinian Authority, which is under the direct control of Palestinian leader Abbas.

At the summit, I showed officials of the Israel Foreign Ministry and Israel Prime Minister the text of the mosque speeches from the previous Friday, as reviewed by Dr. Michael Widlanski, who holds his Ph.D. on the subject of the official media of the Palestinian Authority electronic media.

Israeli government officials were surprised when they perused these texts of Friday's official Palestinian Authority mosque speeches, which called for the violent liberation of all of Palestine, once again this time under the aegis of the new Palestinian leader.

Israeli government officials also did not know that the Fatah organization, also under the leadership of Abbas, had issued a written statement the day before the summit which limited their call for to an end to violence to civilians who live within Israel's pre-1967 lines, meaning that anyone could be killed in the Jewish quarter of Jerusalem, or that anyone who dons an IDF uniform in a Tel Aviv bus or coffee shop was fair play for murder.

Israeli government officials also did not seem to know that the official web site of the Palestinian Authority, on the day of the summit, continued to showed cartoons of Prime Minister Sharon eating little Palestinian Arab children for breakfast.

Before the Sharm summit, I interviewed the expert retained by the Israeli government to monitor incitement in the Palestinian Authority.

That expert indicated that he was not being given any administrative framework within which to operate, and that the Israel Ministry of Defense, which was supposed to be supplying him with raw material on Palestinian incitement was simply refusing to share information at this time with the Israeli government officials who are supposed to report about the state of incitement to the media.

After Defense Minister Shaul Mofaz also issued a statement that there had been a "reduction in Palestinian incitement", I dispatched the text of the mosque speech from Friday and the latest material from ABU MAZEN WATCH to his office, to which our news agency received no response.

Meanwhile, Israeli government officials at the Sharm summit were asked about the legal ramifications of what it meant to free those convicted of murder or attempted murder.

I showed Israeli government officials pictures and descriptions of 25 Israelis murdered over the past two years by convicts who were released by the Israeli government as a gesture of good will, along with lists of more than 1000 Palestinian terrorists who had been freed from Israeli jails in political deals over the past 11 years, and who had returned the terrorist activity.

I asked if the Israeli government would bear criminal responsibility, if any of the new suggested list of convicts were released were then to perform acts of murder.

On this questions of the legal ramifications of the Sharon Plan, the Israel Foreign Ministry officials referred questions of this nature to the officials of the Israeli Prime Minister, who were present at the summit.

Officials of the Israeli Prime Minister referred legal questions of this nature to officials of the Foreign Ministry, who were also present at the summit.

It turned out that the Israeli government retained no legal personnel at the summit, and no Israeli government official would relate to either the moral or legal implications of amnesty for convicted terrorists.

While no Israeli government ministers besides the Prime Minister were present at the Sharm summit, five Palestinian ministers were present.

Two of the Palestinian ministers fielding questions of the press -- Saeb Erekat and Nabil Shaath -- both indicated that they would not settle for anything less than the unconditional release of Palestinian Arabs who sit in Israeli prisons.

As indicated above, Prime Minister Ariel Sharon was not available for questions in Sharm.

And despite repeated statements of all Israeli government officials on tape and on the record, that no ceasefire had been agreed to in Sharm, the public relations firm that works with the prime minister of Israel reported to every possible media outlet that a cease fire had been achieved.

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Syrian Foreign Minister Shara and Canadian Foreign Minister Hold Talks and Endorse Beirut Initiative:
Which Means that Canada endorses the "right of return"
(SANA-Official Syrian News Agency)

[With thanks to IMRA for citing this reference on the web]

The following joint press release would seem to the untrained eye on middle east matters that Canada has just endorsed an the innocuous and harmless "Arab peace initiative",which had been initiated by the Saudi Arabian government and adopted by the Arab League in Beirut on March 30th, 2002.

Either the Canadian minister of external affairs knew or did not know of the commitment of that summit to the endorsement of the "right of return", for millions of Palestinian Arab refugees to be able to take back their homes from 1948 which no longer exist.

Either way, this should be a matter for the Canadian parliament to look into - David Bedein.

Shara and Canadian Counterpart hold talks

DAMASCUS, February 12

Foreign Minister Farouq al-Shara on Saturday said that the just and comprehensive peace on all tracks based on the international legitimacy is the only guarantee to achieve security and stability in the region.

Shara, during an official session of talks with Canadian counterpart, Pierre Pettigrew, renewed the importance of reviving the Arab peace initiative,which was endorsed in Beirut in 2002.

In this regard Pettigrew voiced his country's interest in the Palestinian refugees right to return home in accordance with resolution No /194 /

Regarding Iraq, both sides viewpoints were concordant over the significance of completing the political process after the elections in a way that secures a full participation of the Iraqi people in future of Iraq.

Shara and Pettigrew also discussed latest developments on the regional and international scenes, the existing bilateral relations between Syria and Canada voicing the joint desire to develop those relations in all fields.

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Abu Mazen Watch:
PBC Radio Describes Death of an Infiltrator as "Having Died a Heroic Death"
Dr. Michael Widlanski

Muhammad Abbas's firing of three Gaza security officials has been seen by Western observers as one of several steps by Abbas, a.k.a. Abu Mazen to show he is fighting violence and calls to violence, but this has not been explained that way to the Palestinian listening audience by the official Palestinian Authority media, under the direct control of Abbas.

"Sawt Felasteen," Voice of Palestine radio announced Friday morning that Abbas had "released three security officials from their posts" so that he could "put the Palestinian house in order" and "prevent taking the law into one's hands." This last point was reference to the murder inside a Gaza jail of three Palestinian inmates killed by armed men who broke into the jail to kill the prisoners.

The radio made no mention of the 45 mortar and rocket launchings that hit Israeli targets yesterday, prompting Israeli warnings of invasion and retaliation. The mortar attacks were launched by HAMAS after a Palestinian man was shot while trying to infiltrate an Israeli settlement Wednesday night.

Palestinian Authority-funded newspapers as well as the official Palestinian electronic media universally lauded the infiltrator as having "died a heroic death", while continuing to describe Israeli actions as wanton brutality.

"The youth Ibrahim Fathi Abu Ghazar, 20 years of age, died a heroic martyr's death at dawn today after being wounded last night by fire Israeli occupation forces in Rafah," declared Voice of Palestine state radio in words that were echoed by the Al-Ayyam and Al-Hayat al-Jadeeda newspapers.

"Ibrahim Fathi Abu Ghazar-was martyred near Atzmona when he was attacked without reason," declared official PA Television.

Dr. Michael Widlanski teaches political communication at the Rothberg School of Hebrew University. His doctorate, "Palestinian Broadcast Media In the Palestinian State-Building Process: Patterns of Influence and Control," was based on eight years of research involving more than 7,000 hours of monitoring Palestinian radio in Arabic as well as television and newspaper surveys.

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New Study:
Half of Released Terrorists Return to Terror

[To obtain the report mentioned herein, contact the Law Institute for the Study of Terror and for Rendering Assistance to Terror Victims, at:]

With an Israeli government ministerial committee set to decide which Palestinian terrorists to free as a gesture to Abu Mazen, a new study shows that half of released Arab terrorists return to commit acts of terror.

A booklet published by journalist Boaz HaEtzni and others includes warnings and protests by public and military figures who say that releasing prisoners is dangerous from several standpoints:

  • It places the lives of Israel's citizens in certain danger
  • It harms the IDF's deterrence effect
  • It strengthens both the motivation and capabilities of the terror organizations
  • It weakens Israel's moral stance against terrorists and those who shelter them.

"From 1985 until now," the booklet states, "Israel has released thousands of Palestinian terrorists in various prisoner exchanges. Not one of them underwent a test to determine if he will continue to endanger us or not."

"We have gathered some of the results of past prisoner releases," HaEtzni explained, "and we show that waves of terrorism have been ignited as a result. According to authorized data, some 50% of the released terrorists returned to terrorism after their release."

"Our purpose in publicizing this report," he says, "is to warn those who release terrorists that every other terrorist to be released is expected to endanger us again!"

"Those who must make this decision," the booklet states, "should be aware that the eyes of women, children, babies, elderly, new immigrants and IDF soldiers who were murdered by terrorists released by Israel will be upon you. If the government hadn't decided to release them, and if the President had not signed their pardon, and if the Supreme Court had not refrained from preventing the release, these people would have been with us today."

Though the public and ministerial debate is focused on the question of whether to release murderers or not, many relatives of terror victims say no terrorists at all should be released. Aryeh Bachrach, whose 18-year-old son Ohad was murdered by Arab terrorists almost a decade ago, says there is no difference between terrorists who have murdered and those who did not succeed in their goal.

"Our organization [Almagor] has lists of terrorists released without 'blood on their hands'," Bachrach said, "whose hands became full of blood afterwards. If they have no blood on their hands, it means they didn't succeed the first time, and they'll simply try again."

The ministerial committee comprises Ministers Sharon, Mofaz, Peres, Olmert, Netanyahu, Ramon, Livny, and Ezra.

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