[Newsworthy matters in this report include:

  1. Bipartisan demands from members of Congress to cut off funds to the PA if the PA-Hamas accord continues and if Hamas does not recognize Israel
  2. US Administration claim that the PA – Hamas accord is not being implemented
  3. Non commitment of the US President to veto the Palestinian initiative at the UN
  4. All oversight of US Military aid to the PA supposed to be conducted by Canada and the EU.
  5. No mention of incidents where American trained PA armed forces were involved in attacks on Israelis
  6. No mention of inherent dangers of American trained PA armed forces:


DATE: Tuesday, July 12, 2011

TIME 10:00 AM

LOCATION room 2172 of the Rayburn House Office Building

WITNESSES The Honorable Jacob Walles
Deputy Assistant Secretary of State
Bureau of Near Eastern Affairs
Department of State


Lieutenant General Mike Moeller
United States Security Coordinator for Israel and the Palestinian Authority
Department of State


The Honorable George A. Laudato
Administrator’s Special Assistant for the Middle East
U.S. Agency for International Development (USAID)


Members of the US House of Representatives who raised comments or questions:

Steve Chabot (R-Ohio), Chairman
Rep. Dana Rohrabacher, (R – CA)..
Gary L. Ackerman (D – NY)
Dennis Cardoza (D-CA)
Brian Higgens (D-NY)
Gerald E. Connolly (D-VA)
Gus Bilirakis (R-FL)
Jeff Duncan (R-SC)

Steve Chabot, Chairman Subcommittee on the Middle East and South Asia:

“Recent developments on the ground require that we reassess our current policy trajectory and, if necessary, adjust accordingly.”

“The Palestinian leadership appears dead-set on pursuing a unilateral declaration of independence before the UN General Assembly in September”

“A unilateral declaration of independence is simply rejectionist by another name”

“The recent unity agreement between HAMAS and Fatah is a very troubling development.”

“Israeli PM Netanyahu expressed grave concern for both Israel’s security as well as the prospects for peace. How, he asked us, could the Palestinian leadership be a serious partner for peace if it welcomed into its ranks vicious terrorists who continue to deny the very right of the state of Israel to exist? His concern is more than justified.

“For years we have invested heavily both in money and efforts to help the Palestinians build a state for themselves.”

“General Moeller, I am extremely impressed with the program you are running (Palestinian Police) and although I have my concerns developments, it would be extremely unfortunate if we were to have to end his important program because of an irresponsible decision by those “We are rapidly approaching a watershed moment in US/Palestinian relations.”

Opening statement of Jacob Walles, Deputy Assistant Secretary for Near Eastern Affairs:

“We have been working intensively with the parties to resolve the issues between them through direct negotiations and, simultaneously, supporting the Palestinians I their efforts to create robust institutions a d viable economy”

Our efforts to support Palestinian institutions building are critical to preparing the ground for a successful and stable peace. And they remain critical even as progress on the political track as proved difficult to achieve.”

“We will strongly oppose efforts to resolve these issues at the UN or other international build transparent, accountable and credible institutions of government that will enable stability and sustain economic growth; thy have also been essential to building professional and dependable security forces that have gained the trust of both the Palestinian people and their Israeli counterparts.”

“I would like to provide just one example of the impact of our security assistance on peace and stability. U.S. trained PASF have worked effectively with the IDF to counter the mutual threat of terrorism, and have maintained calm in the West Bank even during periods of tension.”

“The professionalism (of the PASF) has been praised by the Government of Israel and the IDF.”

“The Israeli security officials I met with confirmed that Palestinian security efforts in the West Bank and Palestinian officials assured me that this would remain the case regardless of political developments.”

“President Obama made clear that the Hamas-Fatah reconciliation agreement “raises profound and legitimate questions” which Palestinian leaders will have to answer. The President has been clear that Israel cannot be expected to negotiate with a terrorist organization sworn to its destruction. The US will continue to demand that Hamas accept the basic responsibilities of peace, Including recognize g Israel’s right to exist and rejecting violence and adhering to all existing agreements.”

“As of now, nothing has changed In terms of PA governance or affairs on the ground in the West Bank”

Lieutenant General Moeller, US Security coordinator for Israel and the PA opening statement:

“The Government of Israel has 100% transparency into all aspects of US support to the PASF and that the USSC will never advocate or sponsor activities that could threaten Israeli security. Our program funding is separate from the 2.994 Billion USD in direct assistance to the State of Israel that Congress approved for FY 2011”

Despite recent events including Fatah-Hamas reconciliation efforts, there have been no changes in personnel, no significant changes in security practices on the ground and no change in the chain of command”

IDF/PASF security coordination is still very strong, and the Government of Israel continues to support our security assistance requests. Of course, we will continue to monitor developments closely.”

“We received approval from the Gov. of Israel for the next rotation of the National Security Force Special battalion that will enable 500 new Pal. Recruits to deploy to Jordan and conduct their basic training in August.”

Opening statement of George Laudato, special assistant to the administrator for the Middle EastU.S. Agency for International development:

“USAID’s work is intended to help build the foundation for a future Palestinian state that is stable, democratic, and capable of providing law and order, economically viable, a responsible neighbor to Israel and a source of moderation in the region”

“The direct budget support to the PA is possible because of the transparency and accountability introduced into the PA fiscal apparatus by Prime Minister Fayyad’s administration and further enhanced by the work of the Palestinian Monetary authority under the leadership of Jihad al-Wazir. Direct budget support from the U.S. and other donors allows the PA to pay debt it owes to Israel.”

“Ten schools recently build by USAID provide modern learning facilities for over 7,000 students from the age 6-18.” USAID has trained more than 2,100 school, university, and Ministry of Education teachers.”

“”Last year with the coordination of the Israeli government USAID has provided we invested 2 million to upgrade and reopen the Jalameh crossing between Israel and the northern West bank. Arab Israeli shoppers will spend an estimated 12 million in Jenin.

On-the-job and formal training on lending to nine partner banks, facilitating over 44 million dollars in lending to Palestinian small and medium enterprises. The program complements an OPIC/MEII loan guarantee fund facility for Palestinian enterprises.”

USAID is currently implementing more than 77 million worth of humanitarian and recovery assistance in GAZA. With the approval of Israeli authorities, USAID provides a range of critical support of Gazan families.”

To insure that USAID programs reach the intended beneficiaries, USAID has designed stringent oversight procedures that prevent inadvertent support going to Foreign Terrorist Organizations. USAID and its partners take vetting procedures very seriously and the US Government does not provide assistance to HAMAS or other FTOs.

In Gaza, USAID assistance is provided through international organizations and U.S. NGOs and goes directly to the people of Gaza. No assistance is provided to the Hamas controlled de facto government in Gaza.



Is it that our assistance hasn’t given us leverage or haven’t we used it? The Palestinians must stop incitement and recognize the state of Israel. How can we justify this continued situation?

Walles: We have leverage. We work closely with them. We feel that there are practical benefits…improvements in security, development of institutions needed for two state solutions. This is not an easy process. We still have issues, but we did when I was consul general in Jerusalem for 4 years and I am convinced that they are committed to peace with Israel and two states in spite of the gaps and issues between Israel and Palestinians. We believe that this is in the US interest.

Chabot: We are getting skeptical about this. Fayad is respected of course and has helped the economy but will he continue with unity government. What are the implications if he is replaced by less reputable person?

Walles: We have lots of confidence in Fayad. I don’t want to get in the position of helping the Palestinians select a Prime Minister. I would say that in terms of law and policy what is important are not the individuals but the institutions. An institution that abides by the law is what is important to us, not the people involved.

Chabot; General, please describe the US vetting mech. for the PA police. Follow-up and oversight

General Moeller:

The Palestinian recruits go to Jordan for training with extensive vetting starting with the Palestinian pre vetting before they submit names to the US and to Israel. We comply with all the legal requirements and use all the legal tools in State Department.

After vetting we do our own vetting, the Israelis also, and then the Jordanians to vetting. 650 will move to basic training. The IDF have rejected 5.

Rep. Ackerman:

The goal is to get back to the bargaining table. How do you get them back? The president threw out pre 67 lines. Bibi rejected it. Why don’t we employ some wisdom and cut the baby in half…Narrow the difference. If someone were to say: get back to the table start with the fence for security so this is their defensible line, otherwise they would put it elsewhere. So take the pre 67 lines and the fence and use both lines and the premise to get back to the table, That would mean that settlements on the Israeli side and narrow the differences between 67 and fence. Is there enough to talk about?

Walles: Mr. Ackerman, you and I could work it out. The difficulty is recognizing the two sides on many issues outside of the borders. What Obama did was to see a balanced way to start again to get back to the table. On 22 May he went into detail: When the two sides negotiate the borders, they will be mutually agreed upon and different from 1967.

Ackerman: the premise I am putting forward is defense.

Walles: We only want them to get back based on what the president said.

Ackerman: An interesting proposal.

General Moeller: Logical? God forbid that I would talk about Israeli security concerns from their prospective.

Rohrabacher: Seems to me that the solution is they can talk and get nowhere, the stumbling block must understand that the “right to return” is the issue and cannot be done. We can understand borders, but not the right to return.

Walles: These issues about the return, borders, Jerusalem water, and etc. are something that they will have to decide separately.

Rohrabacher: Until the issue of “the right of return” is taken care of there is no reason to go forward. It seems to me that we are treating this rather than an impasse on policy as some sort of micro managing an economic program. I don’t think that, looking at the peace process as a government program will bring peace, but offering incentives to both sides to come to grips with the issues is a different approach. I think we should take a different approach. Red sea and Dead Sea projects. Where does it stand? Can we do something here to help them to develop this project?

Laudato: The Dead Sea and Red Sea issues impact on the Israelis, Palestinians, and Jordanians…The current status is environmental issues and the issue appears on the agenda on a regular basis, but is only a technical issue.

Bilirakis: Concerning the flotilla, what does this say about the PLO’s seriousness?

Walles: I agree that the flotilla is unnecessary we have no need for additional humanitarian assistance….Concerning the Hamas- PLO accord: Apparently this agreement was done without the knowledge of Fayad.


First question is which Palestinian authority are we talking about, since we have two.

And HAMAS are blood soaked terrorists

The political reconciliation agreement will probably never be implemented. Still the PA must understand that when you get into the cage with a tiger you are not a partner…you are lunch.

Abu Mazen is officially in favor of peace and I have spoken with him and with his Prime Minister. It is obvious that they are going to create a Palestinian State and not destroy Israel. Nevertheless, the PA, and its senior members continue to glorify the terrorists.

It past time to resolve this ambiguity. While Abu Mazon can continue to insist that they are committed to negotiations, their actions speak dangerously of the reverse

Palestinian leadership is running headlong off a cliff because they refuse direct negations. We the US, as a sponsor of the peace process, must draw some red lines to get the process back on track:

  1. Reconciliation deal was and is and will remain a bad idea. “US will not accept it because law and basic decency.
  2. …No one but the PA leadership is forcing the issue to the UN. American aid is intended to support the peace process, and if the PA leadership abandons this process it will cost them hundreds of millions
  3. The peace must be represented in all areas…schools and the streets…The Palestinians cannot give the nod to terrorists and incitement. Incitement is not a phony issue.

Since 2000, Israeli governments have offered full blown peace offers. Act of good faith on Israel now we must ask same from Abu Mazan.

Cardoza: I would like to say I agree with what has been said. HAMAS is an abomination. No support for further funding. We can’t be a party to this, who committed themselves to the destruction of the state of Israel.

Dunkin: I sent a letter for other members to sign to the Chairman of the House Committee on Appropriations, with a requisition that it would restrict funding from going to the PA. This is timely for me.

Higgens: Negotiating with the PA authority is not complicated. Negotiation with the HAMAS means that it is obliterated. Fundamental to peace is survival of Israel.

Connelly: There is overwhelming support for the Hamas to recognize Israel. All must abide by the previous agreements:

Jacob Walles:

This administration believes that this peace is in the national interest of the United States. Israel for the Jews and Palestine for the Palestinians. This has been the objective from the time of President Truman.

We have been working for direct negotiations: direct negotiations ONLY.

Assistance to Palestinian people is guided by our interests. Economy for peace and programs to help them build their government and security and gain trust from both Israel and the PA.

George Laudato is working with US businesses like Google to help the Palestinian firms integrate into the world economy. US AID has allocated 12 million dollars to insure that programs go to what they are intended for will not give money to Hamas. Before giving money to NGO, US AID vets the key officers and vets the organizations against the list of foreign access control.

Chabot: Since 1990, the US government has given billions of dollars to Palestinians. The other Arab States have not been forth coming. They can only pay half of the July budget because of this short fall…The only Arab countries is Algeria and United Arab Emirates…Its is outrageous that the Arabs won’t put their money with their mouth is.

Walles: According to the Palestinian Authority, they have contributed, since 2007, 1.8 billion dollars, mostly from Saudi Arabia. The level of assistance has declined. The 2009 figure was $62 million. The 2010 figure was $287 million. So far 78.5 million mostly from the United Arab Emirates.

Clearly the numbers this year are not at same levels as before. This is why Prime Minister could not meet salaries; they are now dependent on half salaries, including the security forces salaries also halved.

We will discuss this with the Arab states to go back to previous levels.

Chabot: The Palestinian Authority has launched a campaign to gain recognition.. Will the administration pledge to veto

Walles: The President is clear we that we do not support their state declaration, which must be negotiated not created by the UN. He will not support any efforts in that direction

ACKERMAN: I didn’t get a direct answer about the Veto but we will let it go.

President Bush was first president to say there should be Palestinian State

I don’t know of anyone else outside of President Obama who said he would veto unless it was negotiated by both parties…I just wanted to make it clear that it was always in the US interest to negotiate.

We have two parties: one that wants peace and half that doesn’t. Can’t make peace with half of a wannabe country. It doesn’t happen that way. Everyone must understand that they must get their act together…speak with one voice there is pressure that they not get together because of the identities that they represent. The only way to do it is for one of them to give up their identity. Peace or war. Can that happen? The HAMAS only agrees to go to the unity govt out of weakness…will it happen? No new appointments, just the standard. Is that true?

Walles: Thank you. I think you made a point that you can’t make peace with half and half. We are not opposed to unity but it only makes sense if it leads to peace, so we insist that they accept the past agreements. We try to through our assistance programs to use a model for the Palestinian state…the model we see in GAZA is different.

Ackerman: Question: You are great experts but we have to come up with a policy of how to handle the unity of Hamas and PLO. We will either under react or overreact. I don’t think we will underreact we will probably over react. What does that do for humanitarian and security efforts…?

Jacob: Agreement which was signed May 4 in Cairo has seen no action implemented. First issue is who will be a PM and they are not going forward. None of the other issues have been addressed. The Implications of agreement: We would review any government formed, composition, programs, and programs in particular the security. The General will comment on what changes”

General Moeller: If we talk about a cut off of security assistance it would immediately halt our efforts to help them to institutionalize a professional security culture…This would also stop infrastructure.

I believe that both Israel and PA would see it as a breach of faith in terms of security partners and negative regional aspects regarding Jordan. I would see a cut off as a negative thing. All that being said, in all my discussions with senior Israeli general officers, they are adamant that we continue to build the pal security force and have been helpful to this effort.

ISRAEL RESOURCE NEWS AGENCY TO GENERAL MOELLER: Sir, do you enjoy full oversight of the forces you train in the West Bank.

GENERAL MOELLER: Yes. We visit when we are able (because of security restrictions placed on us by Dept. of State) and receive oversight reports from the Canadians and Europeans.

ISRAEL RESOURCE NEWS AGENCY TO GENERAL MOELLER: Can you elaborate on the Canadian and European oversight reports?



  1. The money being thrown down the PA drain is not going to bring peace. You would have to deport all the Arabs who are against peace, because they continue to cause problems and do not demonstrate they are mature enough or able to handle their own country. Israelis are not allowed to travel roads to Arab villages- one of my community members was almost lynched, and only the help of the local Arab Muktar saved him. But nothing is done about the ones who cause the problems. I don’t like not knowing what roads are safe, and if my car should breakdown too close to the Arab village, which is right across the highway from my town, could I be killed? This is no way to live, and to have this enemy country in the middle of Israel makes no sense. The missiles continue to fly from Gaza. Israelis want peace, but the only way I see that happening is to deport the Arabs far away. Jordan is the Arab part of Palestine; Israel is the tiny Jewish part. Why do they need to take more land from Israel? This is the elephant in the room question that no one discusses. It’s time to put it on the table. Just because Jordan’s Bedouin king doesn’t want the Arabs is no reason Israel should give more land. The "2state solution" already exists- Jordan and Israel. Everyone is wasting time trying to make a square peg fit a round hole. It will never work. The answer is Jordan. Jordan has the infrastructure and there’s a defensible border. Jordan is the solution. Please discuss it.


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