Israel is expected to present a report Wednesday at a donor meeting on Palestinian aid in Brussels claiming that the Palestinian Authority is not sufficiently stable to meet the standards of a well-functioning state.

The 44-page report, written by the Foreign Ministry and several other government ministries, will be presented by the Israeli delegation to the representatives at the donor meeting, including Norwegian Foreign Minister Jonas Gahr Store who serves as the chairman of the committee, European Union foreign policy chief Catherine Ashton, and the Mideast Quartet envoy Tony Blair. A copy of the report was obtained by Haaretz.

Open gallery view Palestinians at the market in Ramallah. Credit: Emil Salman

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The report specifies a long line of actions Israel has taken to aid the Palestinian economy in the West Bank and the Gaza Strip, but presents data showing that that the recent economic growth in the West Bank has stopped. Much of the data that is found in the Israeli report also appears in the report published last week by the World Bank.

Parts of the report are worded in a way that aims to make clear that the Palestinian economy is unable to support an independent state. This message stands out in light of the World Bank's report and other reports by international bodies that were published in 2011 in preparation for the Palestinian UN statehood bid last September, that claimed the PA's institutions are developed enough to support an independent state.

"While the present fiscal crisis was caused by a shortfall in donor aid, there were also deviations in the execution of 2011's budget," the report said. "The public finance management system's role in the current crisis may undermine its track record as a system that meets the requirements of a well-functioning state."

The report also indicated that the PA's fiscal management contributed to the current crisis. "This demonstrates the need for further reform in order for the PA to meet the standards of a well-functioning state."

Israel is expected to emphasize before the donor countries that despite the growth of recent years, the Palestinian Authority still needs foreign aid to survive.

"The fiscal crisis is especially acute because much of the West Bank economy still depends on the public sector and on construction projects, both still heavily financed by foreign aid. It also serves as an alarming warning sign for the stability of the Palestinian economy," the report said.

"The current fiscal situation raises doubts about whether the PA will be able to reduce its dependency on foreign aid in the coming years."

Another part of the report deals with the security cooperation between Israel and the Palestinian Authority and reveals interesting data which shows that during 2011, 764 meetings took place between Israeli military and police officials and their Palestinian counterpart in the West Bank – which is a 5% rise from 2010.

The report notes that IDF commanders in Samaria regularly meet their Palestinian counterparts in Jenin, Nabulus, Tulkarem, and Qalqilya.

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