Analysis: Donors Threaten to Withhold Gaza Aid

Donations are desperately needed to rebuild Gaza. (Shareef Sarhan/UNRWA)

Days ahead of a key meeting in Cairo on rebuilding Gaza in the wake of last summer’s bombardment by Israel, the prospect of forking out more millions has left international donors with a frustrating sense of  déjà vu: they were in the same position in 2009 and 2012. This time, there’s a real risk their funding will be meager in the absence of real commitments from both Israel and the main Palestinian factions.

With the two sides seemingly unwilling to budge on key issues, pledges at the 12 October conference in Cairo – to be attended by key figures including US Secretary of State John Kerry – could fall far short of the estimated US$4-5 billion needed to rebuild.

Western diplomats said they would be reluctant to invest new money without fresh impetus in negotiations. “Without a [political breakthrough] I think we’ll probably end up giving [at Cairo] but it will be repackaging the assistance that we already give. In reality none of it will be new money,” a senior European official, speaking on condition of anonymity, told IRIN. “There isn’t a terrible amount of political commitment or hope.”

Johan Schaar, the head of Development Cooperation at Sweden’s Consulate General in the Occupied Palestinian Territory, said that Western donors were facing an accountability issue if new projects are funded without guarantees that Israel will not bomb Gaza again. Little support would be pledged, he said, without faith in a lasting peace. “No one can expect us to go back to our taxpayers for a third time to ask for contributions to reconstruction and then we simply go back to where we were before all this began. That is out of the question.”

Loosening the Blockad

UNRWA, the UN agency for Palestinian refugees, estimates that at least 60,000 homes were damaged or destroyed in Israel’s aerial bombardment of Gaza, with 20,000 completely uninhabitable. Some 110,000 Gazans, mostly children, are now homeless, while a new document prepared by the Palestinian government in Ramallah estimates reconstruction costs at $4-5 billion.

Among the key infrastructure destroyed were dozens of projects funded by international donors – Israeli air strikes hit UNRWA schools seven times. One bridge in the northern Gaza town of Beit Hanoun is believed to have been built with international aid and destroyed four times over in recent conflicts. The Strip’s electricity grid, hospitals and clinics all need to be assembled yet again.

If the current peace is to be more than a stopgap in the fighting in Gaza, both experts and donors argue that the key issue is Israel and Egypt’s restrictions on access to the enclave. The two countries maintain a crippling economic blockade that they argue is necessary to prevent goods falling into the hands of Hamas – the armed Palestinian faction that has controlled Gaza since 2007 but is considered a terrorist organization by Israel and many Western countries. Among the “dual-use” goods that Israel restricts are fertilizers, cement and steel cables – all crucial for any rebuilding effort.

Schaar, whose government has announced it will be the first EU state to formally recognize the state of Palestine, said “the main [priority] is Israeli action in lifting the blockade, giving Gaza the opportunity to re-establish normal economic and other relations with the West Bank and the Middle East. If you speak to the EU and the UN there is a preparedness to work on some real and credible mechanisms to provide the kind of monitoring needed for [the Israelis to feel confident so the border] opening succeeds.”

Some progress has already been made. On 16 September, UN Middle East envoy Robert Serry announced a temporary deal that is supposed to ease access while assuaging Israel’s security concerns.

Although relatively few details of the mechanism have been released, it should allow UN projects to get started relatively quickly, while speeding up the process for Palestinians who will register “dual-use” materials – including the cement Israel believes has been turned into tunnels – in an online database so they can be tracked into Gaza. Both small-scale projects like home renewal and larger projects will be overseen by UN monitors.

Yet that deal stops short of fully opening the crossings and would, diplomats believe, only have a marginal impact on the humanitarian suffering in Gaza. With the peace process at a complete halt, some worry that this temporary mechanism will likely end up being permanent.

“Quick fixes like the reconstruction mechanism may do more harm than good in the long run,” another European diplomat told IRIN, pointing out that it has already undermined the momentum in diplomatic circles to push the Israelis to negotiate a more complete opening of the crossings.

The Israeli mood towards opening up appears mixed. In recent days the Israeli Defense Force’s Chief of Staff Lt-Gen Benny Gantz told the local newspaper Haaretz that Israel needed to keep strict control on the Gaza Strip but also “we have to act rationally. The Strip must be opened to goods – there are 1.8 million people there, stuck between Israel, Egypt and the sea. These people need to live their lives.”

Yet Paul Hirschson, a spokesman for Israel’s Foreign Ministry, told IRIN that the recent conflict had made it evident that Israel was “way too liberal” in allowing construction materials into the territory after the previous war in 2012, as he said much of it had been diverted to Hamas.

“We encourage the international community to invest, but to invest responsibly – to have accountability and transparency to understand where their dollars are going,” he said.

Mohammad Shtayyeh, director of the Palestinian Economic Council for Development and Reconstruction and a member of the Central Committee of Fatah – the faction of President Mahmoud Abbas – is uneasy about any mechanism that allows continued Israeli control over the crossings.

“If everything needs Israeli approval you will never do things in time,” he told IRIN, noting that as the winter approaches the need for housing will become more acute. “If Israeli procedure is going to be implemented as the Bible…  well, I think nobody goes to heaven with this Bible.”

The second European diplomat also expressed concern that this shortsightedness will cause some to declare mission accomplished and ignore the larger Palestinian-Israeli conflict, and in doing so ultimately add fuel to the flames:

“A narrow-minded security approach to guarantee that this will not happen again by disarming the factions in Gaza or putting in place security mechanisms for reconstruction materials and limiting movement is not solving the issue. It is just feeding into the pattern of attack and resistance, attack and resistance.”

Hamas and Fatah Unity

While Israeli concessions on the blockade is a central issue for donors, they are also keen to see progress on the nascent reconciliation between the two most powerful Palestinian factions – Fatah and Hamas.

Abbas’ government of technocrats, formed in June out of an agreement between the rival factions, was largely untested when fighting broke out a month later. Israel has been fiercely critical of the government, as it considers Hamas a terrorist organization.

But until recently, the national unity government was that in name only, as the war set off a new round of bickering between the parties. Talk of reconstruction has at least encouraged politicians to move towards cooperation, with Shtayyeh telling IRIN that the groups needed to put aside their differences for the time being. “We are not linking reconstruction with reconciliation, we have to help our people and this is not connected with the [differences] between us [Fatah] and Hamas,” he said.

In late September the rivals indeed announced a deal that would turn over the administration of the territory Hamas has controlled since 2007 to the new Abbas-led government.

But the Palestinian Authority (PA) has still not taken over Gaza, nor have the territory’s civil servants received their long overdue salaries – a major sticking point between the factions.

If the reconciliation does manage to hold – Palestinian Prime Minister Rami Hamdallah said recently Qatar would pay the wages through an instrument agreed with the UN – this would likely increase donor confidence.

John Gatt-Rutter, the head of the European Union’s mission to the Palestinian Territory, told IRIN that before Cairo, the EU is looking “to see progress in terms of movement and access [from the Israelis], and in terms of the PA being able to exercise its authority in Gaza… some things have to fall in to place.”

If the two parties do manage to work together, the post-war period could benefit the Abbas-led government as it looks to secure a UN Security Council vote on full Palestinian statehood. Speaking shortly before the Gaza deal was announced, Sultan Barakat, director of research at the Brookings Institution in Doha and the founding director of University of York’s Post-War Reconstruction and Development Unit, told IRIN that “this round of reconstruction presents an opportunity for [the new government] to play a more substantive role that goes beyond the bricks and mortar of rebuilding, to help unite the Palestinian people.”


One further complication is how the unity government may limit aid due to counter terrorism laws. The Palestinian unity government, although backed by both Fatah and Hamas, includes no official Hamas members. This should allow most countries that deem Hamas a ‘terrorist group’ to find a way to deal directly with the government.

But the reconciliation may present a problem for the US, a major source of funding to the PA and previous Gaza reconstruction efforts, as it has strict legislative conditions to prevent funding from going to Hamas.

Some members of the US Congress have suggested the lack of Hamas representatives is simply not a strong enough guarantee that the group is not pulling the strings, with Ileana Ros-Lehtinen, chairperson of the House of Representatives’ Middle East and North Africa Subcommittee, arguing in an early June statement that the inclusion of nonpolitical technocrats was a “ploy”: “The PA deciding to partner with a designated Foreign Terrorist Organization once again reaffirms that [Abbas]… is not a true partner for peace and the US must respond by withholding assistance to any Hamas backed unity government.”

Despite such concerns, the US has so far continued to offer emergency assistance to Gaza, including $71 million in late September.

This aid may put the US, a close ally of Israel, in a position to manipulate Abbas’s political manoeuvers. The Palestinian president, who has accused Israel of committing “genocide” in Gaza, has vowed to turn to the International Criminal Court if he fails in his bid to use the UN Security Council to force Israeli withdrawal from the Occupied Territory.

A go at the court or attempted membership in other UN bodies could trigger US legislation that forbids aid to the PA. The tap is also shut off if the PA initiates or actively supports an investigation at the International Criminal Court that “subjects Israeli nationals to an investigation for alleged crimes against Palestinians.”

Abbas himself commented earlier this month that the Palestinians risk losing some $700 million in US money if he moves ahead with the UN membership plan.

It is not only the Americans who have cards left to play in the aid game, however. Despite a certain amount of donor fatigue and low expectations for Cairo, the senior European official told IRIN that the Israelis are concerned by the suggestion that donations at the conference will be underwhelming. As Israel is considered by the UN an occupying power in Gaza, they are held to have primary responsibility for rebuilding the region.

“They [the Israelis] of course would like donors to come in and pledge. They have an interest in making sure that there is some money flows into Gaza. There is [Israeli] control,” he said. “But their fundamental interest, I think, is to make sure that money flows into Gaza so that people start to feel a bit more comfortable so that the lure to arms and violence is a bit less.”

Yet some feel that ultimately the unique importance of the Middle East’s most controversial crisis may mean that despite tough words, donors may eventually back down and fund the reconstruction even without guarantees. Barakat suggests donors will pay up because it is far easier than addressing the underlying causes of and possible solutions to the Israeli-Palestinian conflict.

“We are all willing to pay again and again for the same thing,” he said. “Much of the infrastructure destroyed 2014 was paid for by the EU and Gulf States only a few years [after they built it]. The Palestinian issue is unique in that sense, that only for Gaza will they probably be willing to put their hands into their pockets, because it takes them off the hook and Israel off the hook.”


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