Stabilizing the security environment in the Occupied Palestinian Territory was a major challenge, the primary responsibility for which lay with the parties concerned, Alvaro de Soto, Special Coordinator for the Middle East Peace Process and Personal Representative of the Secretary-General to the Palestine Liberation Organization and the Palestinian Authority, said in a briefing to the Security Council this morning.

He said the responsible authorities must take firm measures to prevent terrorist and rocket attacks against Israel, end the long-running jockeying among the Palestinian security services, and immediately institute closer coordination among them. On the Israeli side, the Secretary-General had called for proportionate responses that did not endanger the civilian Palestinian population. Both parties must abide by the principles of international law and avoid actions that put the peace process at risk.

A second challenge was to meet the needs of the Palestinian people, he said, noting that, in light of current developments, it was likely that there would be an increase in United Nations activities, and that they would continue to interact with their Palestinian Authority counterparts to ensure that those activities served the interests of peace and met the needs of the Palestinian people, as effectively as possible. More activity by the Organization and by non-governmental organizations could not, however, replace the services now provided by the Palestinian Authority, to which many major donors would no longer transfer financial assistance, and which provided the bulk of irreplaceable funding.

He said that a third challenge was to address the reality that both parties were on a different trajectory from that existing when the Quartet had drawn up the Road Map for peace, and the situation on the ground had changed. The Authority had made a radical departure from the tenets that had long been accepted by the Palestine Liberation Organization on behalf of all Palestinian factions. On the Israeli side, the continued expansion of settlements and the deviation of the separation barrier’s route from the 1967 borders raised doubts as to whether the two-State solution could ever be met. Creative thinking was needed, in order to meet the fast-evolving situation on the ground, and the Secretary-General had invited the Quartet and regional leaders for a meeting towards that end.

Outlining the situation in the Occupied Palestinian Territory, he said there was a potentially dangerous deterioration in the conflict and that, in light of the Hamas-led Government’s failure to recognize Israel’s right to exist and its rejection of existing agreements, several donors had withdrawn direct assistance to the Palestinian Authority, while expressing a desire to continue humanitarian funding. The new Government was finding it difficult to meet running costs, including security, and lawlessness was becoming endemic.

There were signs of a still unresolved struggle between President Mahmoud Abbas and the new Government. Prime Minister Ismael Haniyeh had recently announced a new “special force” under the Interior Ministry, but the President had issued an order cancelling that appointment, and senior members of his Fatah faction had accused the Government of trying to incite civil war. Efforts were now under way to ease tensions between the Government and Fatah. Those developments made for a potentially dangerous brew.

He said that, on the Israeli side, talks on forming a coalition Government were based on Prime Minster Ehud Olmert’s election-night speech, indicating a unilateral move to set Israel’s permanent borders, by consolidating the largest settlement blocs. The Government had decided that the Palestinian Authority had become a terrorist entity, and had announced that it would not receive foreign visitors who met with members of the Hamas Government. There had been an alarming increase in violence, in which at least 29 Palestinians and 10 Israelis, including children on both sides, had been killed. Three foreigners had been killed in last Monday’s suicide bombing in Tel Aviv. No condemnation of that terrorist attack had been forthcoming from the Hamas Government, and its spokesmen had legitimized or justified it in various ways.

The Israeli Government had held the Palestinian Authority responsible for the bombing and moved to revoke rights to residency in Jerusalem for Palestinian Authority ministers, he said. Israel had continued its targeted killings and ground operations, aimed at what it described as militants, but among those killed had been children and Palestinian security officers. In addition to human casualties, the shelling had caused structural damage to buildings and roads, and created stress-inducing noise. The Israeli Government had indicated regret over the civilian deaths, but insisted on continuing its actions, unless steps were taken to prevent attacks against Israel.

He said the Palestinian Authority was facing a growing fiscal crisis and its revenues were falling sharply, owing to the discontinuation of direct support in view of the Government’s failure to meet Quartet principles. While several countries had pledged their financial support, none had been received. In addition, Israel continued to withhold tax revenues, citing the Hamas Government’s policy positions. However, it had said it would use those funds to pay electricity, water and fuel bills owed to Israeli companies. A crisis in the banking sector had compounded the problem, because banks were wary of the growing risks of the present circumstances.

Even before the Palestinian elections in January, the Palestinian Authority had faced difficulties with its wage bill, which had grown beyond sustainable levels, he said, noting that it had not paid March salaries to more than 150,000 civil servants, including the security services, which had taken over Government buildings and held protest demonstrations against the donors’ decision to withdraw funding and against Israeli military operations. Such protests were expected to increase and the impending security crisis held the clear potential to trigger a dangerous humanitarian situation. The fiscal crisis could lead to rising unemployment and soaring poverty rates.

Turning to the situation in Lebanon, he said that the fifth round of the National Dialogue had met on 3 April to discuss the question of the presidency, and an agreement could be reached at the next meeting on 28 April. If no accord was reached, that matter would be removed from the agenda, which would then turn to the question of Hizbollah’s weapons.

He urged all sides to exercise restraint, as regional tensions continued to rise, and noted that, on 13 April, Lebanon had marked the thirty-first anniversary of the start of its long and destructive civil war. It was fitting that Lebanese leaders had met on that day to renew their commitment to avoiding a return to conflict.

The meeting began at 10:05 a.m. and ended at 10:35 a.m.

* The 5418th Meeting was closed.

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