The Karni crossing is Gaza’s main artery for trade, with the capacity to process more than a thousand truck crossings a day. Following the outbreak of the second Intifada, however, Israel imposed a tight inspection regime on its side of the Karni terminal that reduced throughput to a trickle. As part of a 2005 U.S.-brokered initiative to improve economic conditions in the West Bank and Gaza, Israel agreed to ease its control over Palestinian roads and border crossings in exchange for American-funded improvements of Palestinian inspection systems and security forces. Between the signing of the accord and Hamas’ seizure of Gaza in November 2007, hard-liners in Israel and their allies in Washington managed to thwart the deal. How they did it, recounted here, offers a glimpse of the obstacles President Barack Obama might face should he seriously negotiate on behalf of a Palestinian state with a viable economy as its foundation.
Part I: Israel sabotages U.S. peace efforts
Ephraim Sneh, a leader of Israel’s pro-peace movement and a former aid to Yitzhak Rabin, is used to the political wilderness. Not long after Rabin’s killing in 1996, he pushed Israel and the US government to buttress the Oslo process by investing in the Palestinian economy. He presented then-US ambassador to Israel Martin Indyk and other senior US policymakers with a list of seven projects that would give ordinary Palestinians a stake in a peaceful future. They included a new airport at the Kallandia refugee camp, sea ports at Gaza, desalination plans – and a modern cargo terminal at Karni.
“If you change the economic reality you can change the political reality,” Sneh told the Americans. “By improving the Palestinian economy, you can fight terrorism.”
No one listened to him. Nearly a decade later, with Israeli roadblocks in the West Bank and the incarceration of Gaza bleeding the Palestinian economy white, Sneh was vindicated. The former commando and brigadier general was given responsibility for Israel’s commitments under the Access and Mobility Agreement, which was signed in November 2005 in response to heavy pressure from then-Secretary of State Condoleezza Rice. At the heart of the agreement was a vision Sneh, a fluent Arabic speaker and a former occupation governor of the West Bank, had nurtured for many years: the development of Karni and other Palestinian border crossings into efficient and secure entrepôts for trade.
The agreement set ambitious goals for itself, particularly as it related to Karni. The Palestinians on their side would be given tens of millions of dollars to train border guards, build new roads, and install security and payroll systems, while the Israelis would be provided with $12 million worth of state-of-the-art scanning and surveillance equipment. By late January 2006, according to the agreement, truck crossings would reach 1,200 a day, a third of which would be carrying goods made by Palestinians for sale abroad, a crucial source of foreign exchange for the impoverished Gaza strip.
The project was quickly snagged, however, on a dispute between Israel and the US Agency for International Development over the scanning equipment. Due to the tight deadlines imposed by the agreement – the scanners needed to be in place by December 31, 2005 – it was decided USAID would first lease the surveillance systems and purchase new ones later on. The leases were signed on December 8 and a few weeks later the scanners were flown from Europe to Tel Aviv on a Russian Antonov 225, the world’s largest cargo jet, at a cost of $500,000. Such an elaborate charter was necessary, according to a December 2006 USAID report, given the size of the equipment and the urgency of the situation.
Once the scanners were delivered, a herd of Israeli bureaucracies – from the Ministry of Defense to the Israeli Airport Authority – submitted to USAID a list of demands for adjustments and alterations that would cost the US government an estimated $6 million to address. The list, according to an official with Chemonics, USAID’s contracting agent on the project, ranged from the substantive – for example, Israel wanted the capacity to scan three trucks at once, which required extensive retrofits and new software – to the trivial, such as a request that the nickel doorknobs in the scanners’ control rooms be replaced with brass ones.
It took six months to address Israel’s conditions even after they had been narrowed down by USAID. A careful reading of the USAID report suggests Israel was trying to sabotage the mobility agreement by delaying integration of the scanners. “The majority of retrofitting tasks required extensive technical modification and in several instances, delayed or interrupted equipment deployment and operations at several sites,” the report states. “These initiatives, while justifiable in the context of [the defense ministry’s] concerns, have been perceived by the suppliers as excessive and redundant for leased equipment.”
In January 2006, USAID began negotiating for the purchase of the replacement scanners. Five companies expressed an interest in the project, but nearly all of them complained of a battery of new restrictions imposed by Israel. The Israeli side, they said, was demanding technology that would have to be developed from scratch even as it desired a system already in production and with a performance record of two years. It also insisted on having a majority of seats on a committee to evaluate the scanners as opposed to the customary single-seat, third-party representation, and it wanted the evaluation process to take 90 days instead of the usual three weeks. These and other conditions would have delayed deployment of the new scanners by at least two months, according to USAID.
When the frustrated bidding companies threatened to walk out of the negotiations, USAID unilaterally signed a contract with AS&E, a US-Chinese joint venture. Outraged, a senior Israeli defense official filed a formal protest to the US embassy complaining that USAID’s pre-emptive action jeopardized Israeli security. USAID was then instructed to write a letter to the defense ministry reaffirming the centrality of its security concerns, but the contract was honored.
The dispute over the scanners had been resolved, though Israel’s demands for retrofits would delay their full deployment for several months. As a result, cargo traffic at Karni would be kept to a paltry few hundred truck crossings a day. But after Hamas’ victory in parliamentary elections in January 2006, it no longer mattered. Well before the first vote was cast, Israel’s allies in Washington were mobilizing for the internment of Palestine.
Part II: The Consequences of Incarceration
Washington responded to Hamas’s election triumph with a financial embargo on the Palestinian Authority. The Access and Mobility Agreement was all but frozen, particularly as it related to the Karni crossing, Gaza’s main artery for trade. On average, only some 20 trucks crossed into and out of Gaza in 2006, about 5 percent of the volume targeted by the mobility accords. A year after the US sanctions took root, the World Bank had declared Karni’s operations as “unacceptable.” The Gazan economy continued to deteriorate and by mid-2007 the United Nations was warning of a humanitarian crisis.
Though few observers on the US side were expecting Hamas’s landslide win, the American Israel Political Affairs Committee was taking no chances. Well before the vote, the Washington-based lobbying group was circulating memos to lawmakers encouraging them to reject any Palestinian government in which Hamas had a role. (AIPAC keeps a meticulous record of how American lawmakers vote on Israel-related legislation. It regularly asks a friendly Senator or House member to demand a roll-call vote so it can “score” members for their voter loyalty, then publishes the results in AIPAC Insider, the group’s quarterly periodical.) On its website, AIPAC took credit for mid-wiving House Resolution 575, signed on November 18, 2005, which declares that “Hamas and other terrorist organizations should not participate in elections held by the Palestinian Authority.”
Within days of Hamas’s victory, and with AIPAC assiduously working the process, two draft resolutions were introduced from the House of Representatives and one from the Senate. Language from the bills was synthesized into a small provision and inserted into an emergency funding bill for the Iraq war, which was signed into law on June 15, 2006. The provision forbids “appropriations for foreign operations, export financing, and related programs … for assistance to the Palestinian Authority.” Unusually, the legislation denied the president a waiver authority.
With the stroke of a pen in Washington, all US-funded projects in Palestine were cut off. They included programs to make the Palestinian judiciary more transparent, to train and educate its police force, and to professionalize the Palestinian election commission. In a June 23 memo, USAID instructed its contractors in the West Bank and Gaza to “ensure no funds are expended which could be considered as assistance to the Palestinian Authority.” European donors largely followed suit.
For Keith Dayton, the legislation was a surprise attack on his efforts to upgrade the Karni crossing. Only a month or so before the Palestinian elections, the US Army lieutenant general and former Pentagon policy planner had been appointed by the State Department as its security coordinator on the project. Suddenly, he and his team of experts were prohibited from dealing directly with any member of the Palestinian government other than President Mahmoud Abbas. To compensate, a detail of Canadian military officers and engineers were brought in to act as proxies for the Americans.
Lacking the US funds he requested to strengthen security and to bolster economic activity on the Palestinian side of the crossing, Dayton was reduced to cobbling together non-US aid on a piecemeal basis. He and his team persuaded a Dutch NGO to help finance a flower farm, for example, and dollops of aid were cajoled from Turkey and Sweden. They managed to raise C$1.2 million from the Canadian government to buy security cameras, and a British aid agency agreed to train border guards and build a new mess hall.
For four weeks in January, Gaza erupted into an urban killing ground as gunmen from Fatah and Hamas, following months of tensions, engaged in running street battles. To avert a civil war, King Abdullah of Saudi Arabia invited leaders from the two sides to Mecca, where they hammered out a truce that became the foundation for a Hamas-led unity government. To shore up Abbas, and to preempt a wider conflict, the Bush administration in January 2007 announced it would provide the president’s office with some $86 million in aid, $16 million of which was to be invested in Karni. But when the aid package was submitted to Capitol Hill for approval, Congress blocked it. Nita Lowey, a legislator who chairs the State and Foreign Operations subcommittee of the House Appropriations Committee, said she placed a hold on the package out of fear that some of the money could find its way into the coffers of Hamas.
The freeze perplexed many observers in Washington. After all, they argued, the aid was to be distributed not in cash but in kind, as items and services like computers and training procured by the Dayton team. Capitol Hill sources say Lowey made her decision after meeting with Daniel Ayalon, Israel’s then- ambassador to Washington, “who makes no distinction between Hamas and Fatah,” according to a legislative aid who requested anonymity.
In mid-March, a few weeks after Lowey’s decision, Ephraim Sneh, who was managing Israel’s side of the AMA, traveled to Washington for the annual leadership conference of AIPAC. There, he admonished the group’s members for not supporting the Karni redevelopment as a cornerstone of the mobility agreement. He called on the offices of Lowey and the late Tom Lantos, the California representative who was a co-sponsor of the anti-Hamas bills, and emphasized the importance of Karni. He and an aid from the defense ministry also met with members and staff of the foreign relations and foreign appropriations committees. At every stop, Sneh delivered the same message: what’s good for the Gazan economy is good for the state of Israel.
Eventually, some funds were released for Dayton’s operations. But by then it was too late. In June, Hamas overran US-backed Fatah forces in a brief but bloody civil war. Soon after that, radical groups unleashed their rocket attacks on southern Israel.