No Sign Administration Will Use Financial Leverage to Reverse Palestinian Leadership Change

By Patrick Goodenough | April 15, 2013 | 6:41 AM EDT

The relationship between Palestinian Authority chairman Mahmoud Abbas and P.A. Prime Minister Salaam Fayyad, seen here in September 2010, had long been difficult. (AP Photo)

( – Secretary of State John Kerry expressed regret Sunday at the resignation of Palestinian Authority Prime Minister Salaam Fayyad, but he gave no indication that the Obama administration would use U.S. aid to the P.A. in a bid to reverse the move.

Fayyad’s role in the P.A. has long been regarded by Western donors as a key element in their ongoing financial backing for an administration dogged over many years by charges of corruption and inefficiency. But the Western-backed economist resigned Saturday, after weeks of rumors and amid growing tensions with P.A. Chairman Mahmoud Abbas.

Kerry, while traveling in Asia, called Fayyad late Friday to try to dissuade him from taking the step. Speaking in Tokyo Sunday, Kerry said he would prefer that the prime minister wasn’t leaving.

But, Kerry added, “in order to be a viable government, there’s got to be more than one person that you can do business with.”

“So we will continue to work at this and hope that President Abbas finds the right person to work with him in a transition, and work with us, to establish confidence,” he said.

The U.S. in theory wields significant influence with the P.A., having provided it with more than $3.5 billion in bilateral assistance since Palestinian self-rule was established under U.S.-mediated peace accords in the early 1990s.

But administrations have long been averse to withholding funds, lest this damage cherished hopes for a Mideast peace settlement.

Fayyad is a member of neither Abbas’ Fatah organization nor of its rival, the Gaza-based terrorist group Hamas. Unpopular with both, his presence has for years been cited as a hurdle to reconciliation between the two.

U.S. efforts to bolster him were evident during President Obama’s recent visit to the region, where virtually every time Obama referred to positive progress in the West Bank, he mentioned Fayyad by name.

An announcement during that trip that the U.S. had unblocked almost $500 million in aid to the P.A. that had been frozen by Congress was also seen as an attempt to boost Fayyad.

But a longstanding rift between Fayyad and Abbas worsened in early March when P.A. finance minister Nabil Qassis, an Abbas loyalist, resigned while Abbas was abroad.

The finance ministry had fallen under Fayyad until a year ago where at Abbas’ insistence it was relinquished to Qassis in a cabinet shuffle. Abbas refused to accept Qassis’ recent resignation and ordered Fayyad to reinstate him, to no avail.

Beyond that spat, Fayyad has long been an impediment to attempts by Abbas to reconcile with Hamas.

The Islamist group defeated Fatah in legislative elections in 2006, and then in 2007 seized control of the Gaza Strip amid bloody clashes with Fatah forces. Amid that crisis, Abbas set up an emergency government under Fayyad, whose position was never confirmed by parliament nor accepted by Hamas.

Egypt and Qatar have tried to mediate reconciliation between the rival factions for years, without success. Turkey is the latest to try, and Prime Minister Recep Tayyip Erdogan is planning to visit Gaza soon, hoping to succeed where others have failed.

Israel opposes a Fatah-Hamas unity deal as long as Hamas refuses to renounce violence and accept Israel’s right to exist.

Hamas, established in 1987 as a Palestinian arm of Egypt’s Muslim Brotherhood, has been designated by the U.S. government as a “foreign terrorist organization” since 1997. Its founding charter calls for Jews to be killed and says all Muslims are duty-bound to join a jihad to destroy Israel.

Under U.S. law, Hamas’ participation in a P.A. government should put future American financial aid at risk, for the same reasons: The 2006 Palestinian Anti-Terrorism Act makes assistance to the P.A. conditional on its compliance with obligations to renounce and combat violence, recognize Israel’s right to exist, and abide by existing agreements signed with Israel.

Every time Fatah-Hamas unity talks have looked close to reaching an agreement the Obama administration has been pressed by lawmakers on the funding question. But as the talks never delivered an actual deal that brought Hamas into the P.A. government the matter has not come to the fore.

The latest crisis comes at a time when the administration has launched a new push to revive the moribund peace process, with Kerry emphasizing the importance of economic revival in the West Bank.

How that would work without a trustworthy partner in control of the budget remains to be seen, but Fatah has a poor record.

“Fatah does not like the idea that its leaders and members can no longer steal international aid because of Fayyad's presence in power,” Palestinian journalist Khaled Abu Toameh wrote in a recent analysis for the Gatestone Institute.

“The Fatah leaders are yearning for the era of Yasser Arafat, when they and others were able to lay their hands on millions of dollars earmarked for helping Palestinians.”

Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow