World Bank says that aid and investment will be pointless

International donors meeting in Paris on Monday have been asked to raise $5.6bn over the next three years in support of the Palestinian Authority.

This comes amid warnings about the deteriorating humanitarian conditions in the Palestinian territories and an irreversible unraveling of the economy unless Israel eases its restrictions on the West Bank and Gaza Strip.

While Palestinian officials were optimistic that the 90 participant countries and organizations attending the one-day Conference of Donors for a Palestinian State would be generous, Israel indicated no major rethink on its closure policies.

Tzipi Livni, Israel's foreign minister, is expected to tell the donors that "we would like to support and bolster the Palestinian Authority, but not at the expense of the security of Israel", the Israeli media said on Sunday.

Samir Abdallah, the Palestinian planning minister, said that he expected "full support" for the Palestinians' $5.6bn aid request.

"I think that all signs coming from here and there tell us that we get full support," he told the AP news agency in Paris.

Promised funding

The German and the British governments have put aside a combined $780 million, while the US has raised its promised funding to $540m, pending a congressional clearance that ties its approval to guarantees on money not falling into the hands of "extremists".

The Palestinians will face a challenge convincing the West to provide aid to both the West Bank and the Gaza Strip, which is facing Israeli and international sanctions after Hamas took full control of the territory in June.

Meanwhile, the UN has urged donors to raise $462m to meet humanitarian needs in the Palestinian territories in 2008.

"In addition to continuing fatalities from direct Israeli-Palestinian conflict, 2007 saw a dramatic increase in deaths and injuries due to internal Palestinian violence," a statement released by about 40 UN organizations and non-governmental groups operating in the Gaza Strip and West Bank said.

"The poverty rate stands at 57 per cent and food insecurity affects 34 per cent of the population."

On Thursday, the World Bank asked Israel to reverse its closure policies, warning that increased aid money and economic investment in the Palestinian economy would be futile unless the restrictions are eased.

The International Committee of the Red Cross (ICRC), on Friday, also condemned Israel, saying security concerns did not justify the severe restrictions.

"The Palestinian territories face a deep human crisis, where millions of people are denied their human dignity. Not once in a while, but every day," the ICRC said.

Israeli restrictions

Israel currently controls Gaza's borders along with its air and sea space.

In addition, more than 700 checkpoints and roadblocks cover all areas of the West Bank, preventing Palestinians' freedom of movement. All exits in and out of Gaza are blocked by Israeli forces.

So far only Britain has said it will link disbursement of aid to improved conditions on the ground, including an easing of Israeli restrictions and Palestinian government reform.

Salam Fayyad, the Palestinian prime minister and a former International Monetary Fund economist, has been actively campaigning to convince Palestinians at home and international donors that the government has established a transparent accountability system to stem mismanagement and corruption.

He says that he is doing his best not to disappoint the donors, who have seen more than $10bn in aid largely go to waste since 1993 because of mismanagement and Israeli attacks.

Fayyad has already won the support of the World Bank and the International Monetary Fund (IMF) for a three–year economic plan that includes promises to trim the oversized public payroll and reduce hundreds of millions of dollars in utility subsidies.

The IMF has said that the plan is ambitious, but achievable.

The plan being presented aims to assure donors that they are not expected to prop up the Palestinian Authority indefinitely, even though the bulk of the aid, $3.9 billion, would go towards the government's budget deficit.

The balance is to shift gradually to development projects, under a scenario that has Israel easing restrictions and enabling the Palestinian private sector to recover.

Mahmoud Abbas, the Palestinian president, however, would have to dispel fears among Palestinians about the Gaza Strip being excluded from getting aid.

In statements prior to their departure to Paris, Palestinian officials said they were seeking help for all Palestinians.