Final Status Talks To Move Ahead Despite Lack of U.S. Funding

By Julie Stahl | July 7, 2008 | 8:07 PM EDT

Jerusalem ( - Israeli Prime Minister Ehud Barak plans to push ahead with "final status" talks with the Palestinian Authority despite the fact promised American funding has not materialized.

Barak on Wednesday discussed with ministers legal aspects of agreements Israel has signed with the Palestinians thus far, as well as the forthcoming final status talks.

Similar consultations scheduled for Thursday will focus on security matters related to future separation between Israel and the Palestinians.

Barak's ministerial preparations are proceeding despite Congress' decision to excise $2 billion from the administration's foreign aid request. The Foreign Aid Appropriations Bill consequently excluded promised funding for the parties involved in the Wye River agreement - Israel, the Palestinian Authority and Jordan.

Barak has expressed confidence that the U.S. will eventually come through with the $1.9 billion promised by President Clinton, funding intended to help finance the economic and security requirements of implementing Wye.

As part of his $14.5 billion foreign aid request, Clinton had asked Congress for $500 million as a first installment of the $1.9 billion pledged to the Wye partners. The White House now vetoed the bill.

In the meantime, Israel's Deputy Defense Minister Ephraim Sneh is in the U.S. to discuss the situation with congressional leaders and see what can be done about it.

"Nobody here has given me any rational reasons why they failed to approve Wye [funding]," Sneh was quoted as saying in Washington. He said congressmen he spoke to had all indicated their decision had to do with matters unrelated to Israel.

Professor Barry Rubin, Deputy Director of the Begin-Sadat Center for Strategic Studies told the cut of Wye funding was the result of an "internal [U.S.] quarrel" with Congress trying to pressure Clinton on other issues.

"[It's] a short term problem," Rubin said. "[I have] no doubt it will be resolved."

However, some analysts see in the development a sign that, even if the U.S. honors Clinton's promises on Wye funding, it will not be willing to finance further peace efforts.

"If anyone is thinking about an agreement with Syria and Lebanon or a final-status settlement with the Palestinians in terms of tens of billions of dollars, including compensation for the refugees - he can just forget about it," the Hebrew daily Ha'aretz quoted a Washington source as saying. "The United States is not a cash machine."

"The difficulties encountered in the approval of the Wye agreement are a clear sign of which way the wind is blowing in Congress. What is happening now is a very sharp indication," the source said.

In rare agreement with Israel, the PA, too, is eager to see the Wye pledges fulfilled. Palestinian Finance Minister Mohammed Zuhdi Nashashibi hinted at the seriousness of the situation if the funds are not released.

"No one can quit his responsibilities and expect others to continue peace efforts," Nashashibi said.

As part of the Wye River accord, the U.S. pledged $1.9 billion to help the parties meet their commitments - $1.2 billion for Israel, $400 million for the Palestinians and $300 million for Jordan. So far, Congress has only released $100 million to Jordan.

Israel's share was intended to help defray the costs of deploying troops from areas to be ceded to the PA, finance the fight against terrorism, and fund strategic weapons to enhance Israel's security.