Aid Request Emphasizes U.S. Support of Palestinian Authority Leadership

President Bush has proposed a sixfold increase in aid to the Palestinians, including $150 million in direct cash transfers to the Palestinian Authority, in an effort to bolster the government in advance of a Middle East peace conference planned for later this month in Annapolis.

The $435 million in additional aid, on top of $77 million requested earlier this year, has attracted little notice in the president”s $45.9 billion supplemental request last week to fund the wars in Iraq and Afghanistan. But, if approved, it would constitute the administration”s largest amount of direct aid to the Palestinian Authority. Previously, the administration had limited cash transfers to $50 million at a time.

The Bush administration largely cut off aid to the Palestinian government when the militant group Hamas unexpectedly won legislative elections in 2006. But earlier this year, a unity government deal between Hamas and its Fatah rivals collapsed. Hamas forcibly took over the Gaza Strip, leaving the Fatah-led government in charge of only the West Bank.

Since Hamas seized Gaza, the Bush administration has sought to demonstrate support for Palestinian Authority President Mahmoud Abbas and new Prime Minister Salam Fayyad. The Annapolis conference is designed to show that the Fayyad government is on track to create a Palestinian state, with the backing of Arab leaders, and State Department officials said the money sought by Bush is designed to signal that substantial aid will flow to leaders who reject terrorism.

The aid request supports a critical and immediate need to support a new Palestinian Authority (PA) government that both the U.S. and Israel view as a true ally for peace,” the State Department said in its detailed justification for the aid request, which was sent to Congress yesterday. The “funds would provide immediate, demonstrable improvements in the lives of Palestinians by supporting the PA”s efforts to extend the rule of law, achieve economic revival, improve governance, and avoid a fiscal crisis.

Congressional officials said the aid request will face close scrutiny and has little chance of approval if the Annapolis conference does not show substantial results. Secretary of State Condoleezza Rice plans to travel to the region later this week to prod Israeli and Palestinian negotiators to agree on a joint text that will set the stage for negotiations.

The president has won the expectations game on Annapolis: Expectations are low, said a Republican aide, who was granted anonymity in order to speak candidly. Absent anything accomplished at Annapolis, I can”t imagine the Hill will go for this.

The budget justification said the $150 million cash transfer would help the Palestinian government avert an immediate fiscal crisis, while $130 million more in project assistance would help create immediate employment opportunities that would demonstrate moderates can deliver jobs and provide hope for a better economic future.

An additional $40 million would be devoted to improving the administration of Palestinian ministries, $10 million would be used to provide security for experts overseeing the project assistance, $25 million is aimed at narcotics enforcement, and $25 million would be devoted to training Palestinian forces loyal to Abbas. Also, $20 million would be used to make immediate improvements in delivering health care at government clinics. The remaining $35 million would help refugees.