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UNITED STATES POLICY TOWARD THE

PALESTINIANS IN THE AFTERMATH OF

PARLIAMENTARY ELECTIONS

HEARING

BEFORE THE

COMMITTEE ON 

INTERNATIONAL RELATIONS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MARCH 2, 2006

Serial No. 109–166

Printed for the use of the Committee on International Relations

(

Available via the World Wide Web: http://www.house.gov/international—relations 

(II)

COMMITTEE ON INTERNATIONAL RELATIONS 

HENRY J. HYDE, Illinois, Chairman 

JAMES A. LEACH, Iowa 

CHRISTOPHER H. SMITH, New Jersey, 

Vice Chairman 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

EDWARD R. ROYCE, California 

PETER T. KING, New York 

STEVE CHABOT, Ohio 

THOMAS G. TANCREDO, Colorado 

RON PAUL, Texas 

DARRELL ISSA, California 

JEFF FLAKE, Arizona 

JO ANN DAVIS, Virginia 

MARK GREEN, Wisconsin 

JERRY WELLER, Illinois 

MIKE PENCE, Indiana 

THADDEUS G. MCCOTTER, Michigan 

KATHERINE HARRIS, Florida 

JOE WILSON, South Carolina 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL MCCAUL, Texas 

TED POE, Texas 

TOM LANTOS, California 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

SHERROD BROWN, Ohio 

BRAD SHERMAN, California 

ROBERT WEXLER, Florida 

ELIOT L. ENGEL, New York 

WILLIAM D. DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

JOSEPH CROWLEY, New York 

EARL BLUMENAUER, Oregon 

SHELLEY BERKLEY, Nevada 

GRACE F. NAPOLITANO, California 

ADAM B. SCHIFF, California 

DIANE E. WATSON, California 

ADAM SMITH, Washington 

BETTY MCCOLLUM, Minnesota 

BEN CHANDLER, Kentucky 

DENNIS A. CARDOZA, California 

RUSS CARNAHAN, Missouri 

THOMAS E. MOONEY, SR., Staff Director/General Counsel 

ROBERT R. KING, Democratic Staff Director 

LARA ALAMEH, Professional Staff Member 

JEAN CARROLL, Full Committee Hearing Coordinator 

(III)

C O N T E N T S 

Page

WITNESSES 

The Honorable C. David Welch, Assistant Secretary, Bureau of Near Eastern 

Affairs, U.S. Department of State ...................................................................... 13

The Honorable James R. Kunder, Assistant Administrator, Bureau for Asia 

and the Near East, U.S. Agency for International Development ..................... 17

Lieutenant General Keith W. Dayton, United States Security Coordinator, 

U.S. Department of State .................................................................................... 24

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable C. David Welch: Prepared statement ........................................... 16

The Honorable James R. Kunder: Prepared statement ........................................ 19

Lieutenant General Keith W. Dayton: Prepared statement ................................ 25

APPENDIX 

Material Submitted for the Hearing Record .......................................................... 47

(1)

UNITED STATES POLICY TOWARD THE PALESTINIANS IN THE AFTERMATH OF PARLIAMENTARY ELECTIONS 

THURSDAY, MARCH 2, 2006

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON INTERNATIONAL RELATIONS, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:37 a.m. in room 

2172, Rayburn House Office Building, Hon. Henry J. Hyde (Chairman of the Committee) presiding. 

Chairman HYDE. The Committee will come to order. Before we 

begin our proceedings this morning, I would like to pay tribute to 

the American Foreign Service officer and the Pakistani employee of 

our mission who was driving him who were killed today in Karachi, 

Pakistan, in an obvious attempt to intimidate the President of the 

United States. We also pay tribute to the Pakistani security officials who were accompanying our employees and were killed or injured while protecting these individuals. Neither the President nor 

our Nation will be intimidated by this terrorist attack. The names 

of the victims have not yet been released. 

Since we have senior officials of the Administration present, I 

would like to take this opportunity to extend through you our condolences to your colleagues at the Department of State and to express our continuing support for the efforts to protect those who 

represent our Nation overseas. 

Mr. LANTOS. Mr. Chairman? 

Chairman HYDE. Mr. Lantos. 

Mr. LANTOS. On our side, we want to endorse and fully support 

your statement on this matter. 

Chairman HYDE. Thank you. 

On January 25, 2006, Palestinians turned out in large numbers 

to elect a new legislative council. The unsettling result was a decisive win by Hamas, which had previously been declared a terrorist 

organization by the United States and which remains formally 

committed to the destruction of Israel. 

There is no shortage of analyses offered to explain this upset. 

Many observers stress that the elections took place during a time 

of growing discontent among the Palestinian population across a 

range of issues, including widespread frustration with the Palestinian Authority for having made insufficient progress toward 

achieving statehood. In addition, the powers that be, most prominently the dominant Palestinian organization, Fatah, were increasingly factionalized and commonly perceived as thoroughly corrupt. 

2

Regardless of the reasons, and as disappointed as many are by 

the election results, the Palestinian people deserve recognition for 

having conducted what were arguably the freest and fairest democratic elections in the Arab world. As Secretary Rice stated in 

Davos last month, ‘‘The Palestinian people have apparently voted 

for change, but we believe that their aspirations for peace and a 

peaceful life remain unchanged.’’ But the victory by Hamas has 

presented the United States with a dilemma. 

If Hamas remains committed to Israel’s destruction, it will be impossible for the Palestinian Authority to be a credible negotiating 

partner, but given that there is no candidate waiting to fill that 

role, the always precarious search for some version of peace in the 

region cannot move forward. 

The key question, then, is whether or not Hamas can be persuaded to change its rejection of Israel’s right to exist and to accept 

that the fundamental interests of the Palestinian people can only 

be met if not by peace, then by a working accommodation between 

the two sides. 

What leverage do the United States, the Israelis, the Europeans, 

the moderate Arab leaders, and other members of the international 

community possess to assist this process? The most obvious instrument is financial support. Over many decades, the United States 

has been generous in helping to meet the humanitarian needs of 

the Palestinian people with its donations amounting to nearly $2 

billion over the years, but most of that assistance has been provided indirectly through the United Nations and other 

internationqal organizations. We have given little direct aid to the 

Palestinian Authority itself, and that is unlikely to change in the 

foreseeable future. 

Further, following Hamas’s victory, the House and Senate agreed 

on a resolution stating that the United States should not give direct aid to the Authority as long as its legislature remains dominated by those who call for the destruction of Israel. But a cutoff 

of funding for humanitarian programs would have the effect of 

helping terrorist regimes like Syria and Iran expand their support 

among the Palestinian population. 

Without question, continued assistance from the U.S. and other 

donors is essential to meeting basic human needs and avoiding a 

worsening of conditions in general. According to the World Bank, 

unemployment in the West Bank and Gaza is an astonishing 23 

percent, but the real level may be as much as twice that amount. 

Forty-three percent of the population is living below the poverty 

line. Who can doubt that these are ingredients for continued instability and ultimately an explosion? 

The Administration has informed our Committee that it is reviewing all forms of assistance to the Palestinians. I am certain our 

witnesses today will enlighten us on this and other issues, including our discussions with the Israeli Government and others in the 

region and in the international community. 

In the Book of Isaiah is found the oft-quoted phrase:

‘‘They shall beat their swords into plow shares and their spears 

into pruning hooks. Nations shall not lift up sword against nation. Neither shall they learn war anymore.’’

3

This vision has remained beyond reach ever since these words 

were written more than two millennia ago, and yet it remains an 

enduring element in our ambitions for the future. But the world’s 

billions dream different dreams, and we cannot expect noble sentiments alone to conquer irreconcilable differences and end deadly 

struggles. Some problems have no identifiable solution, but the 

baser instincts of man can be pressed into service for ends beyond 

those of immediate contest. Self-interest can be harnessed to advance common goals, and even fiercely defended separations can 

become stable boundaries. 

Even as we must confront reality on its unyielding terms, we 

must hope that others understand that the virtues of self-interest 

need not be narrowly confined. I hope the leaders of Hamas will 

combine their new mandate with wisdom and compassion for their 

own people and avoid the exhilarating temptations of apocalyptic 

visions, for these can only add to the suffering, desolation, and 

hopelessness they have long reined among the people for whom 

they have sought and now have been given inescapable responsibility. 

Let me now turn to my friend, the Ranking Democratic Member, 

Mr. Lantos, for any opening remarks he may wish to make. 

Mr. LANTOS. Thank you very much, Mr. Chairman. This hearing 

could not be more timely since the officially designated terrorist organization, Hamas, will form its cabinet sometime this month. It 

is bizarre that some governments are still deciding how to respond 

to this political farce. So there could be no better time to remind 

everyone of what is at stake. 

Here is a salient quote from the Charter of Hamas:

‘‘Israel will exist and will continue to exist until Islam will obliterate it, just as it obliterated others before it.’’

Mr. Chairman, this hate-filled screed, the Hamas Charter, takes 

venom to new levels. It indicates that giving an inch of ground, literally or figuratively, is tantamount to renouncing Islam, and 

Hamas leaders have not changed their rhetoric one iota since winning the election, far from it. Hamas leaders are now holding out 

their hands and asking U.S. taxpayers to continue the flow of dollars, but the blood of dozens of Americans and hundreds of Israeli 

men, women, and children is on those hands. 

It has long been U.S. policy not to support terrorists in any way. 

We must make absolutely clear that we will not deal with the terrorist thugs who now lead the Palestinian Authority. Not a single 

penny of U.S. taxpayer money should end up in Hamas coffers. My 

good friend, Congresswoman Ileana Ros-Lehtinen, and I have introduced legislation, H.R. 4681, that turned this basic principle into 

law. 

I also want to make it clear that simply ending direct assistance 

to the Palestinian Authority does not cut it. There must be an end 

to all nonhumanitarian assistance that could benefit Hamas. The 

last thing in the world we in Congress want to do is to let a Hamas 

government reap the credit for development projects that are funded by the American taxpayer. 

Of course, I support the continuation of humanitarian assistance 

to the Palestinians, but we must be clear about how we define such 

4

aid. The phrase ‘‘humanitarian assistance’’ means just what it says, 

and it is clearly defined in our legislation: Food, water, and medicine. 

The United States must respond to this new situation with honor 

and integrity: No negotiations, no contact, no assistance beyond humanitarian aid. We have a standard that this country has long 

maintained. We have a statute now in the works, and we have an 

example to set in the eyes of the world. And we should make clear 

to all, Mr. Chairman, that we strongly oppose their hosting or 

meeting with Hamas. 

I am deeply disappointed by the Turkish and Russian decisions 

to host Hamas. The words and deeds of this gang of terrorist thugs 

put them beyond the pale of organizations that governments should 

deal with, and the fact that these invitations have come from two 

countries with their own terrorist problems, countries that stridently demand nobody meet with the terrorist groups that threaten 

them, is sickening hypocrisy. 

Mr. Chairman, let me briefly turn to a matter of critical national 

security that is directly within our witnesses’ purview, the pending 

transfer of the management of six key American ports to a company owned by the Government of Dubai, a part of the United 

Arab Emirates. 

Five years ago, the UAE Government looked the other way as 

their citizens helped plan and execute the September 11 attacks on 

the United States. Financing for the attacks was arranged through 

their banks, and two of the hijackers were their citizens. They have 

held telethons for terrorists. 

Mr. Chairman, the government officials who were in charge 5 

years ago are still in power today, yet without any consultation 

with Congress, the Administration cleared the sale of the uniquely 

sensitive management of six major United States ports to Dubai 

Ports World, a company owned and controlled by the government. 

While some have breathed a sigh of relief that there is now a 45-

day review of the deal, I am totally unimpressed. 

This deal is being concluded today. Does anyone really believe 

that the review will reverse that? It is a bureaucratic fiction, a fig 

leaf for the appalling truth. We will know how bad this deal was 

only when it is too late. 

In addition to the security concerns, Mr. Chairman, it is simply 

outrageous that we would turn over management of ports to a company that, by their own admission, actively participates in the 

Arab League boycott of Israel, our ally and the only democracy in 

the Middle East. American firms are prohibited from complying 

with the boycott, yet now the Administration seems willing to turn 

over our critical ports to governments that actively discriminate. 

Mr. Chairman, the foreign policy and national security implications of the Dubai Ports World deal are staggering. I, therefore, respectfully and formally request that our Committee schedule a 

hearing on this important subject in the immediate future, leading 

to legislation that will prevent such lunacy once and for all. Thank 

you, Mr. Chairman. 

Chairman HYDE. Normally, the proceeding is 1 minute for each 

Member to unburden him or herself of whatever they can in 1 

minute, but that is to make available to as wide a group of MemVerDate Mar 21 2002 10:38 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\WORK\FULL\030206\26332.000 HINTREL1 PsN: SHIRL
5

bers some time at the microphone. I am being pressured by two 

Members to increase that to 2 minutes. I am going to do that, but 

I am going to suggest that we have votes about 11:30, I am told, 

and we just take away at one end what we give at the other end. 

So let us try to hold it to 2 minutes. There is no law that says you 

have to ask a question at this period in the hearing, so I will leave 

it to your good judgment. 

We also call Members in the order in which they appear in the 

committee room rather than by alphabetic order or some other format. So let us first go to Mr. Lantos. You have 2 minutes, sir. 

Mr. LANTOS. I yield my 2 minutes, Mr. Chairman. 

Chairman HYDE. I thank you. Mr. Leach? 

Mr. LEACH. I yield. 

Chairman HYDE. I thank you. Mr. Berman? 

Mr. BERMAN. Mr. Berman reserves his time. 

Chairman HYDE. Mr. Smith of New Jersey. 

Mr. SMITH OF NEW JERSEY. I will be very brief, Mr. Chairman. 

When the terrorist organization, Hamas, gained 74 of the 132 

seats in the Palestinian Legislative Council, it underscored a concern that I have had for some time that free and fair elections are 

not ends in and of themselves but are only one of the pillars in the 

quest for democracy and respect for fundamental human rights. 

Clearly, and Hamas’s victory takes this beyond theory, free and 

fair elections can usher into power brutal dictatorships with a 

seemingly popular mandate. The rule of law, not just any law, but 

the rule of just law, is indispensable to the creation of any sane 

and compassionate society. 

This hearing, and I am very happy that you have scheduled this, 

Mr. Chairman, is extremely timely as Congress faces the challenge 

of earnestly desiring to tangibly assist the Palestinian people, especially its vulnerable children, as well as advancing a durable peace 

process, while not enabling an organization that has long hated 

Jews and refused to accept Israel’s right to exist. Thank you, Mr. 

Chairman. I yield back. 

Chairman HYDE. Thank you, sir. Mr. Ackerman of New York? 

Mr. ACKERMAN. The Palestinian elections have created a new reality in the Middle East: The Palestinian Authority, led by Hamas. 

We all know Hamas is a pack of blood-thirsty killers. We know that 

their stated intent is to destroy Israel. We know that two states living side by side in peace and security is not their goal. 

So it strikes me as odd, Mr. Chairman, that when faced with this 

reality, too many people are asking the wrong question. The question is not how can we fix this? The question must be, how can we 

make them fail? It is sheer folly to proceed from an assumption 

that Hamas will abandon its core beliefs now that they are engaged 

in the electoral process. Does the mantle of an election necessitate 

our finding some way to appease them? Do we really have to agree 

because they garnered a majority? Is it really incumbent upon us 

to brush aside their loathsome ideology and the pile of corpses that 

they have created as if it no longer mattered? 

I have heard the suggestions that we could provide assistance 

through Abu Mazen’s office that with enough legal hair splitting 

and spin doctoring, we could continue business as usual without involving Hamas. That is ridiculous. We should have been assisting 

6

Abu Mazen a year ago when such assistance would have made a 

difference, a point that I made repeatedly after his election. Now 

that is too late. The idea that we can put a mask on a monster and 

then deal with the monster must be abandoned. 

For the sake of our overarching interests in the Middle East and 

the global War on Terror, for the sake of any hope of peace, we 

must affirmatively seek the failure of Hamas. Promotion of democracy does not bind us to whoever is elected. The Palestinian people 

made a choice. They elected terrorists to govern them, to represent 

them, and to speak for them. Now we have a choice to make. Will 

we acquiesce in the elevation of a radical Islamist terrorist organization as an international partner, or will we stand fast? 

Tacit acceptance, grudging acceptance, partial acceptance are all 

acceptance, and allowing any would be our failure. Let me suggest 

that if Hamas can withstand the demands of the whole world, then 

the world’s single superpower ought to be able to muster the will 

and insist that the blood-soaked terrorist are not partners for 

peace, that they are not negotiating partners, and that they are not 

aid recipients, and that they will not be absolved for the hundreds 

they have killed. 

Chairman HYDE. The gentleman’s time has expired. 

Mr. ACKERMAN. I ask unanimous consent, Mr. Chairman, to put 

the rest of my statement in the record, and I am very sorry that 

the Chairman saw fit to usurp the Subcommittee’s scheduled hearing on this so that the distinguished Chair and Ranking Member 

and all of the Members of the Subcommittee could have had the 

full ability to express their opinions. 

Chairman HYDE. Ms. Ros-Lehtinen? 

Ms. ROS-LEHTINEN. Thank you so much, Mr. Chairman. It has 

been longstanding United States policy to bring both sides of the 

Israeli-Palestinian conflict to the negotiation table and work toward a peaceful compromise. However, to achieve peace and security, Israel needs, must have, a legitimate partner on the Palestinian side who seeks the same goal rather than calling for Israel’s 

destruction and death to the Jews. 

A Hamas-controlled Palestinian Authority is an enormous threat 

to United States strategies to ensure regional stability, to counter 

terrorism, and to promote tolerance and true democratic reform. 

The President and the Congress have been clear on the conditions 

that must be met for U.S. assistance to be provided to the PA in 

its entirety. The Hamas-led PA must renounce terrorism, must disarm extremists, recognize Israel as an independent, democratic, 

sovereign, Jewish state, and commit to prior commitments by the 

PA. 

I sincerely hope that we do not waver from these commitments. 

I would appreciate it if, in their testimony, the panelists would address news reports saying that the Administration has significantly 

eased its opposition to Hamas and that the State Department has 

established guidelines to ensure continued U.S. financial and other 

support to a Hamas-controlled PA. 

The EU, as we know, decided to continue to fund a PA Government led by Hamas without first demanding that they change their 

charter and abandon terrorism. A senior Hamas leader expressed 

his satisfaction with the fact that the EU reversed its position reVerDate Mar 21 2002 10:38 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\WORK\FULL\030206\26332.000 HINTREL1 PsN: SHIRL
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garding the freezing of funds ‘‘without Hamas having to make any 

concession or yield to pressures.’’ U.S. policy must be different than 

the EU. Thank you, Mr. Chairman. 

Chairman HYDE. Mr. Berman? 

Mr. BERMAN. Mr. Chairman, thank you. I just came back from 

the Middle East. I had the opportunity briefly to speak with Ambassador Welch and General Dayton and appreciate very much the 

work that they are doing. 

Two quick points. One, to my friend, the Chair of the Subcommittee, I do not understand the EU decision to have been as 

you described. There is a difference of opinion about, during this 

interim period before the government is formed, whether assistance 

should continue to the Palestinian Authority. The EU position is 

that assistance should be provided. 

I do not understand that the decision they made that was announced was a decision to continue assistance to the Palestinian 

Authority at the point where Hamas forms the government. If it is 

such a decision, then it is a serious, serious blow because you are 

absolutely right; they have in no way done anything to meet the 

three requirements. I think it is very important for us to remember 

not to let the wish govern the thought. 

Even from that Washington Post interview, which was later renounced by the person designated to be the prime minister under 

this authority, there is no indication whatsoever that Hamas is 

prepared to meet the three conditions or is willing to or is even seriously entertaining that fact, and we should not let our hope that 

things can go normally and that the zebra can change its stripes 

and that good governance and a government that is prepared to 

live in coexistence with and recognize the legitimacy and the right 

to exist of the state of Israel is coming into place because there is 

no evidence that that is the case. 

Therefore, the assistance which Israelis, Americans, and hopefully Europeans, and others believe should continue on a humanitarian basis not to the Palestinian Authority—it is very important—is definitely not intended to be assistance to the PA. Thank 

you. 

Chairman HYDE. The gentleman’s time has expired. 

Mr. Tancredo of Colorado? 

Mr. TANCREDO. Nothing, sir. 

Chairman HYDE. Mr. Delahunt of Massachusetts? 

Mr. DELAHUNT. Thank you, Mr. Chairman, and I will just take 

the time to pose a question that I hope will be answered during the 

course of your testimony, and it is a point, I think, that was implicit in the statement of the Ranking Member, Mr. Lantos. 

I would like to hear from either the Ambassador or from General 

Dayton the support coming from the United Arab Emirates for 

Hamas, and do you anticipate that that support will continue from 

the United Arab Emirates for Hamas, if, in fact, it exists? I yield 

back. 

Chairman HYDE. Mr. Paul of Texas? 

Mr. PAUL. Thank you, Mr. Chairman. I just have one brief point 

to make, and that is that foreign interventionism, the policy that 

we follow in this country, always has unintended consequences, 

and this quandary that we face in Palestine right now is a perfect 

8

example of how we helped to create these problems. Not too many 

years ago, both Israel and the United States helped create and encourage Hamas, yet now that has come back to haunt us, and that 

is not unlike our token type of alliance and help to Osama bin 

Laden and Saddam Hussein in the past. 

But then we spend a lot of lives and a lot of money promoting 

the principles of democracy, and then we even use some of our 

money to try to influence elections around the world, including the 

one in Palestine, and when it does not go our way, then we go back 

to an attempt to form another group similar to Hamas to counterbalance Hamas, just as we did to counterbalance Arafat and the 

PLO. 

I would suggest that there are too many unintended consequences of foreign interventionism, and, worst of all, we lose 

credibility. What we are doing over there now tends to make us 

look badly with almost every Arab Muslim nation. So I still argue 

the case for nonintervention, which is a tradition that the American people followed and our country followed for a long time. It is 

too bad we do not give it serious consideration today, and I yield 

back. 

Chairman HYDE. Ms. Watson of California? 

Ms. WATSON. Thank you, Mr. Chairman. I want to associate myself with the remarks that you made about the death of the Embassy officer. Protection of our Embassies is a top priority, as protection of our ports. I think it is foolhardy to put the ownership and 

management of any port in the hands of a foreign nation, regardless, and I think we need to do more oversight in this Committee 

of our foreign policy. Thank you, Mr. Chairman, and I yield back 

the balance of my time. 

Chairman HYDE. Mr. Poe of Texas? 

Mr. POE. Thank you, Mr. Chairman. The Palestinian elections 

held just over a month ago have great potential to aggravate the 

tense situation in the Middle East. Hamas, under the banner of 

change and reform, did win a majority of the seats in the Palestinian Legislative Council. This is the same Hamas that has been 

designated a foreign terrorist organization by the State Department of the United States. It is now in a position to negotiate as 

a so-called bona fide player in the Middle East. Hamas’s steadfast 

refusal to disarm, their saber rattling, and their insistence of the 

destruction of Israel is a penetrating siren of warning to all nations 

that value true freedom and democracy. 

They must prove their desire to reform by renouncing terror and 

recognizing Israel’s absolute right to exist. No rhetoric, just results. 

Hamas should not receive any money, not a dime, from the United 

States or our allies until we see some proof. Otherwise, the money 

we send to Hamas may become blood money for terrorists. 

Mr. Chairman, there should be no tribute for terrorists or terrorist nations. Thank you, Mr. Chairman. 

Chairman HYDE. Mr. Sherman of California. 

Mr. SHERMAN. The Hamas platform specifically calls for ethnically cleansing the entire Middle East of 5 million Israelis. It implicitly calls for their genocide. The fact that the Palestinians voted 

for Hamas is not a reason to view Hamas as benign but, rather, 

to acknowledge that the Palestinians voted for malignancy. I join 

9

with Mr. Lantos and so many others in saying that we should give 

nothing to an Hamas-led government, no matter what face is put 

in front of it, and that we should limit all of our aid to the Palestinians to humanitarian aid. I would go further and say that even 

that humanitarian aid should be very limited. 

Any aid helps Hamas politically, and every dollar we give to the 

Palestinian humanitarian aid is a dollar we have taken away from 

child survival, AIDS, malaria, Darfur, Congo, earthquake and flood 

victims around the world. 

Finally, I join with Mr. Lantos in calling for hearings of this 

Committee to deal with the port situation because of the direct connection. Just a few months ago, Hamas posted a press release 

praising the UAE for its generous aid to that terrorist organization. 

The response of the UAE was to bask in the glory of being praised 

by Hamas. So much money has been raised in the UAE for Hamas 

with the full support of the leaders of that government. The President of the UAE serves on the board of a charity which funds dollars to Hamas and other terrorist organizations. I am not sure 

these folks ought to be running our ports. I look forward to hearings and, hopefully, a markup. I yield back. 

Chairman HYDE. Mr. Barrett of South Carolina. 

Mr. BARRETT. I yield back. 

Chairman HYDE. Thank you. Mr. Engel of New York? 

Mr. ENGEL. Thank you, Mr. Chairman. To those who say, well, 

this was a free and democratic election, I say, with choices in elections, there are consequences, and just because the Palestinian people voted for Hamas does not mean that we should just go merrily 

along and pretend that everything is fine. 

Everyone mentions, and it is only fair and just, that until Hamas 

renounces terrorism, recognizes Israel’s right to exist, and abides 

by all previous agreements that were signed by the Palestinians, 

there should be no aid to Hamas. I am very much chagrined when 

Russia and some of the European nations, typically not having any 

spines or backbones, once again are showing that they are looking 

to sort of cut corners and finesse the situation. 

There ought to be pressure on Hamas until they understand that 

there are, again, consequences. I believe that this Committee, 

again, should, as was mentioned in the past, have many hearings, 

many oversight hearings, on this issue, on the ports issue, on all 

of these issues because, again, as my colleague, Mr. Sherman, said, 

it is all connected. 

I had the occasion to meet with Mr. Abbas with Senator Obama 

before the elections, and it occurred to me that Mr. Abbas may be 

well-meaning, but the moderates there really need to grab the bull 

by the horns. In some ways, there is a silver lining in everything. 

I do not want to see a coalition government, frankly, with the Palestinians because this will give Hamas a way to hide. It will give 

Hamas a way to finesse the situation. It will give the government 

a way to somehow try to pretend that they can continue business 

as usual with Israel and with the United States and with the West, 

and Hamas, therefore, would not have to change any of its positions. 

Chairman HYDE. The gentleman’s time has expired. 

10

Mr. ENGEL. Thank you, Mr. Chairman. Let me just finish by saying pressure needs to be put on Hamas to change its positions, or 

there will be consequences, and the pressure has got to come from 

the United States. Thank you, Mr. Chairman. 

Chairman HYDE. Mr. Chabot of Ohio? 

Mr. CHABOT. Mr. Chairman, in order to get to the witnesses 

more quickly, I will yield back. Thank you. 

Chairman HYDE. Thank you, sir. 

Ms. Lee of California? 

Ms. LEE. Thank you, Mr. Chairman. I agree, Hamas must renounce violence. By renouncing violence and recognizing Israel, 

Hamas can bring the Palestinian Authority into stronger negotiations in terms of their position to achieve its ambitions of sovereignty, self-government, and the Palestinian state. 

The democratic election of Hamas, of course, is far from ideal, 

but it is also precisely the time for the United States to aggressively pursue the roadmap and to encourage all parties to resume 

negotiations. I believe that these negotiations should encourage the 

Palestinian Authority, require the Palestinian Authority, to reiterate its commitment to Israel’s right to exist and also to the processes and to the outcomes that are envisioned in the roadmap. 

The stability and security of both the Palestinian and Israeli people depend upon continued engagement, and I believe that we have 

a duty, as the United States of America, as a country that is trying 

to work toward peace and security in the Middle East, we really 

have a responsibility to ensure that continued engagement increases so that tensions not be allowed to give rise to further chaos 

and to further violence. 

Thank you, Mr. Chairman, and I yield the balance of my time. 

Chairman HYDE. Thank you. Mr. Wilson of South Carolina? 

Mr. WILSON. Nothing, sir. 

Chairman HYDE. Ms. Berkley of Nevada? 

Ms. BERKLEY. Thank you, Mr. Chairman, and thank you, gentlemen, for being here with us. 

While the Palestinian people took an historic step toward voting 

out the old guard and the remnants of Yasser Arafat’s corrupt political machine, they, unfortunately, took two steps back in electing 

Hamas to a majority in the Palestinian legislature. A Palestinian 

legislature ruled by Hamas, in my opinion, threatens the peace and 

stability of the entire Middle East. Hamas is a terrorist organization. It has killed more than 500 people since 1989, including two 

dozen United States citizens. Its involvement in the political process has not altered its stated goal of destroying Israel. Electing 

Hamas is the equivalent of electing the Taliban or Al Qaeda to govern the Palestinian territories. 

Hamas must disavow its stated goal of destroying Israel and 

change its charter to recognize Israel’s right to exist as a free and 

independent Jewish state. If these reforms are not made immediately and carried out with conviction, Hamas should not be recognized as a legitimate party in the democratic process, and until 

Hamas disarms, renounces violence, and recognizes Israel’s right to 

exist, it is my opinion we should end all United States aid to the 

Palestinians. I am also opposed to any humanitarian aid. 

11

One of the low points in our relations with our so-called Arab allies was when Secretary of State Condoleezza Rice was in the Middle East recently standing next to the Egyptian representative, 

who looked at her, and after her requesting that they do not support Hamas with aid, said that they were going to do it anyway. 

This is a country that we give $2 billion of aid to spit in our faces. 

The Saudis, who are the largest exporters of terrorism and the 

largest financiers of terrorists throughout the world,——

Chairman HYDE. The gentlelady’s time has expired. 

Mr. Meeks of New York? 

Ms. BERKLEY. Thank you. 

Mr. MEEKS. Thank you, Mr. Chairman. I will be brief. It seems 

clear the ball is in Hamas’s court. There are three things they have 

to do—it is just that simple: Renounce violence, the absolute right 

and recognition of Israel to exist, and accept and honor all prior 

agreements, as any sovereign nation would be. We, in the United 

States, no matter what President was here, we have got to honor 

agreements. But the ball is in their court. We should not, and cannot, fund Hamas or send money over there until we know that they 

accept the terms of the agreement. It is just that plain and simple. 

I yield back. 

Chairman HYDE. Mr. Schiff of California? 

Ms. SCHIFF. The rejection of the corruption of Fatah, and that, 

I think, is what happened in the Palestinian elections, has to be 

a lesson for us with respect to other regimes in the region and 

what might follow the collapse of those regimes. 

We cannot support a Hamas government. We just cannot, and I 

have no confidence in anything but the longest of terms that 

Hamas will change, and our unwillingness to support Hamas is not 

a rejection of democracy or the democratic process, but the fact that 

the Palestinians chose a terror organization to be their new governing party does not require the international community, and 

does not require the United States, to support that terrorist organization or its government. 

Elections do have consequences, and I think we need to use all 

of the instruments of our diplomacy to provide a united front to cut 

off Hamas from financial assistance, and that includes nations in 

the region, particularly nations that receive large amounts of 

American assistance. Nations that have recognized Israel’s right to 

exist cannot be allowed the duplicity of saying, we have treaties 

and agreements to recognize Israel’s right to exist, but we also support financially those that are determined to wipe Israel off the 

map. 

I look forward to hearing from you how we intend to use those 

diplomatic instruments and what we can do here in the Congress 

to assist in that effort, and I yield back the balance of my time. 

Chairman HYDE. Mr. Cannahan of Missouri? 

Mr. CANNAHAN. Thank you, Mr. Chairman. With the electoral 

victory of a known terrorist organization whose own charter calls 

for the destruction of Israel, it is obviously a setback in the peace 

process in the Middle East. We now find ourselves in an interesting 

situation. Our country pushed for free and fair elections, but now 

we are faced with the reality that a terrorist organization has won 

12

those elections. The axiom that elections have consequences is particularly appropriate in this situation. 

Hamas continues to reiterate their commitment to the destruction of Israel. Therefore, we cannot, and should not, support any 

organization that has such a position. Both the United States and 

the European Union recognize Hamas as a foreign terrorist organization. Both the U.S. and the EU have provided hundreds of millions of dollars in development aid to the PA over the last several 

years. Should this financial support continue, much of the money 

could flow into the coffers of Hamas without any oversight of the 

U.S. or the international community. 

The obvious conclusion that we can all draw from this is that 

U.S. and EU development aid will end up being used by Hamas to 

carry out terrorism-related activities, both against Israel and elsewhere. 

We must also deal with the fact that a nuclear Iran is a direct 

ally of Hamas. While the implications of a nuclear Iran are far 

reaching, its impact on Hamas has the ability to be seen far and 

wide. We need to concentrate on steps that both the United States 

and our allies around the world can take to prevent Iran from gaining further influence in Hamas. 

I look forward to hearing your testimony here today, gentlemen. 

Thank you. 

Chairman HYDE. Thank you. Mr. Fortenberry of Nebraska? 

Mr. FORTENBERRY. Thank you, Mr. Chairman. I appreciate you 

holding this hearing today to examine United States policy toward 

Palestinians at this watershed moment for the Middle East, and I 

appreciate the witnesses joining us today. 

The quartet of nations has been unambiguous in its call for 

Hamas to renounce violence and its goal to destroy Israel. The 

United States has also been unambiguous on the position that providing U.S. Government assistance to any entity that has the goal 

of the destruction of Israel is unthinkable, yet Hamas appears intransigent as the world looks on, and Iran seeks to use this opportunity to extend its influence in the region as well. 

While it is clear that the Palestinian people voted for change and 

government accountability, it is also clear that a majority of them 

favor the restoration of the peace process galvanized by the Oslo 

Accords. 

In assessing United States policy in view of Hamas’s success in 

the recent Palestinian elections, I believe that we must be careful 

not to isolate voices of moderation and play into the hands of those 

who would promote and extol terror. In the interest of our national 

security, the ultimate aim of United States-Middle East policy is to 

seek a just outcome for people who thirst for peace and a better 

life. We need to be very thoughtful and deliberate as we contemplate the best means to achieve this outcome, maintaining the 

flexibility to communicate with Palestinians who share our commitment to peace and who have worked to promote a constructive 

Israeli-Palestinian dialogue. 

I am keenly interested in your testimony and hearing your perspectives today on the possible parameters of our potential engagement with such Palestinians, as well as our efforts to assist the development of civil society and to mobilize an international conVerDate Mar 21 2002 10:38 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 F:\WORK\FULL\030206\26332.000 HINTREL1 PsN: SHIRL
13

sensus that facilitates the Palestinian full and unconditional renewal of its current international commitments. Thank you, Mr. 

Chairman. 

Chairman HYDE. Thank you, sir. 

And, last, Mr. Wexler of Florida. 

Mr. WEXLER. Thank you, Mr. Chairman. I believe much of what 

needs to be said has been said. I would just like to take maybe a 

small different tack for a moment. 

I believe Ambassador Mark Ott is in the room. Mr. Ott serves 

as the EU envoy to the Middle East. I acknowledge his presence 

for two reasons: One, because he is a gentleman of high standing 

and very significant caliber, but also because I think there are two 

models of leadership that we have seen employed: The Iraq model 

and the Iran model. The Iraq model, where America led, and we 

had a division with Europe and a division within Europe, and the 

Iran model where the United States and Europe have essentially 

worked together. 

I think all of us, in the pursuit of what we believe is America’s 

interests, would prefer the Iran model of leadership for America as 

it applies particularly to Hamas. I say this in the hope that if we 

are to successfully defend the principles that were enunciated by 

the quartet, it is going to require that both Europe and the United 

States work together in concert to isolate those that refuse to acknowledge the principles so artfully outlined by the quartet. 

Thank you, Mr. Chairman, for giving me that time. 

Chairman HYDE. Thank you, Mr. Wexler. 

C. David Welch was sworn in as Assistant Secretary of State for 

Near Eastern Affairs on March 18, 2005. Prior to his appointment, 

he served as the American Ambassador to the Arab Republic of 

Egypt from 2001 to 2005. A career Foreign Service officer, Ambassador Welch has served in key positions in the Middle East. 

Mr. James Kunder is Assistant Administrator of the Bureau for 

Asia and the Near East at the U.S. Agency for International Development. From July 2002 to 2004, he served as Deputy Assistant 

Administrator for Asia and the Near East. Mr. Kunder has extensive governmental and private sector experience in assistance and 

international development. 

Lieutenant General Keith W. Dayton has served as United 

States Security Coordinator for Israel and the Palestinian Authority since December 2005. Most of his time has been spent operating 

from the region. Prior to his current position, General Dayton 

served as Director of Strategy, Plans, and Policy in the Office of the 

Deputy Chief of Staff for the United States Army. 

Ambassador Welch, please proceed with a 5-minute summary of 

your testimony. Your full statement will be made a part of the 

record. 

STATEMENT OF THE HONORABLE C. DAVID WELCH, ASSISTANT SECRETARY, BUREAU OF NEAR EASTERN AFFAIRS, U.S. 

DEPARTMENT OF STATE 

Mr. WELCH. Thank you, Mr. Chairman. Thank you also for your 

kind and respectful words for our colleagues in Karachi, Pakistan. 

I appreciate the opportunity to work with this Committee, and on 

behalf of those of us who work in this particular area of the world, 

14

the Near East, and, of course, our colleagues in South Asia, I am 

grateful that you recognize the contribution of all of us. 

I am pleased to have the opportunity to come before this Committee at this important time. Although a great deal has transpired 

in the course of my first year as assistant secretary, as you have, 

I am going to focus my remarks today on the last 2 months, a time 

of important changes in the Israeli-Palestinian area. 

On the 25th of January, the Palestinians voted in Legislative 

Council elections the first parliamentary vote in 10 years. These 

elections were free and fair, characterized by good security and 

high voter turnout, and they reflect the growing trend toward more 

democratic opportunity throughout the Middle East. 

As you know, our commitment to democracy is not measured by 

the achievement of a particular electoral result. Democracy is not 

always a process that produces outcomes that are in accordance 

with our desires. Hamas won a victory over Fatah in the Palestinian elections, and in light of that victory, we have to grapple 

with some difficult questions about the future of our relationship 

with the Palestinian Authority, the likelihood of a terrorist group 

in the Palestinian Government, and our assistance programs in the 

Palestinian territories. 

Let me say at the outset that our commitment to the security of 

Israel remains unshakable. We continue to consult closely with our 

ally and friend on ways forward in light of these developments. 

During my meetings with Israeli officials, as recently as this past 

weekend, I found that we largely share goals and concerns. In the 

broader international context, together with our quartet partners, 

we have outlined a strategy that is based on principle and pragmatism. 

It was United States leadership that led to the January 30 quartet statement that expressed our belief that the Palestinian people 

have the right to expect a new government to address their aspirations for peace and statehood. With governing comes responsibility. 

We stated that any future assistance to any Palestinian Government will be reviewed against that government’s commitment to 

three principles: Abandonment of terror and violence, recognition of 

Israel, and acceptance of previous agreements and obligations. It is 

not possible to pursue a peaceful life for your people while you engage in terrorism, nor is it possible to make peace with a country 

whose very right to exist you deny. 

Thus, we have placed the onus squarely on Hamas. Hamas will 

now have to bear responsibility for the decisions it makes and face 

up to the consequences of those decisions, which will shape the 

international community’s approach to issues involving the Palestinians and regional peacemaking efforts. 

Until a new government is formed, we are cooperating with the 

international community to facilitate the work of the caretaker government. In the last month, we have worked with Arab governments and the international communities to stabilize the finances 

of the Palestinian authority until a new government takes over. In 

December, Saudi Arabia and Qatar pledged additional support for 

the PA, and, more recently, Russia has done so. We continue to 

maintain close contacts with President Abbas and Acting Finance 

15

Minister Jihad Al-Wazir to maintain the financial viability of this 

caretaker government. 

The Hamas victory has necessitated a thorough interagency review of our assistance program for the Palestinians, which is diverse. As this Committee knows, most assistance has been provided 

directly to the Palestinian people through NGOs and contractors. 

Our review encompasses each and every U.S. Government assistance effort involving the Palestinians and includes any assistance 

provided to the Palestinian Authority itself. The work of this review is well advanced. 

We expect to be able to recommend ways forward to our senior 

leadership in the days to come and to receive their guidance. I can 

say that, as part of that effort, we have already requested, and the 

Palestinian Authority has agreed, to return the unexpended balance, which we calculate to be in excess of $45 million, of funding 

provided last year for infrastructure projects in Gaza. This is the 

$50 million set-aside. 

Let me briefly outline principles that are guiding this review. 

First, we have not, we do not, and we will not provide assistance 

to Hamas in government or out of government. Second, because it 

serves important United States national interests, we are looking 

for ways to continue to help the Palestinian people, particularly 

through provision of assistance to help meet basic humanitarian 

needs. Third, our policy will be logical and consistent in order to 

both send a clear signal to the Palestinians of our expectations and 

also to secure the support and emulation of an international donor 

community which provides considerable Palestinian aid. Finally, 

we will ensure close consultation with the Congress and, of course, 

this Committee, in particular, as well as with key friends in the region, as our review is completed. 

We have encouraged our neighbors in the international community to similarly review their assistance efforts based upon the 

principles set forth by the quartet. The international community 

has a critical role to play as we move forward, and we are working 

to ensure that Hamas receives the consistent message that it must 

commit to the principles of ending violence and terror, recognizing 

Israel, and accepting previous agreements. 

It is important to remember that the Palestinian people’s aspirations to live in peace remain strong. Although Hamas won a majority of the seats in the PLC, it won those seats on the basis of a 

narrow plurality of votes. Hamas was able to turn that narrow plurality of popular votes into a larger number of seats due to superior 

organization during the election and idiosyncracies of the bloc voting system for a portion of the seats in the elections. Opinion polls 

and analysis of the balloting suggests the vote for Hamas was more 

a protest against Fatah’s governance record than a vote of support 

for Hamas’s political agenda. We continue to believe that the Palestinian people support the policies of President Abbas, whom they 

also elected on a platform of peace just over a year ago. President 

Abbas has made clear in his speech on February 18 that he expects 

the future government to accept previous agreements and obligations between the parties and adhere to a negotiating process with 

Israel aimed at a two-stage solution. 

16

The challenge we face in the coming months is to continue to 

demonstrate to the Palestinian people that their interests and aspirations are best served by supporting those who share a vision of 

the path of peace. It will be important for us to maintain contact 

with and support to moderate Palestinian voices. Democracy is a 

right, but elected officials must act responsibly and accept the consequences of their decisions. Elections do not wash away all sins. 

Hamas was responsible for dozens of suicide bombings in the past 

decade, and, by its own statement, the current calm is only a tactical lull. 

It is up to Hamas to embrace change to better pursue achievement of the desires of the Palestinian people to live in peace or to 

take responsibility for the consequences of its failure to do so. You 

cannot deliver a peaceful and better life for your people if you are 

not committed to peace. 

Thank you very much, and after my colleagues speak, I will be 

happy to take your questions. 

[The prepared statement of Mr. Welch follows:]

PREPARED STATEMENT OF THE HONORABLE C. DAVID WELCH, ASSISTANT SECRETARY, 

BUREAU OF NEAR EASTERN AFFAIRS, U.S. DEPARTMENT OF STATE

Thank you, Mr. Chairman. I’m pleased to have the opportunity to address the 

committee today. Although a great deal has transpired in the course of my year as 

Assistant Secretary, I would like to focus my remarks today on the last two months, 

a time of important changes in the Israeli-Palestinian arena. On January 25, Palestinians voted in Legislative Council Elections, the first parliamentary vote in ten 

years. These elections were free and fair, characterized by good security and high 

voter turnout, and reflect the growing trend towards democracy throughout the Middle East. 

As you know, our commitment to democracy is not measured by the achievement 

of a particular electoral result; democracy is not always a process that produces outcomes that are in accordance with our desires. Hamas won a victory over Fatah in 

the Palestinian elections, and in light of that victory, we have had to grapple with 

some difficult questions about the future of our relationship with the Palestinian 

Authority, the likelihood of a terrorist group in the Palestinian government, and our 

assistance programs in the Palestinian territories. 

Let me at the outset say that our commitment to the security of Israel remains 

unshakable and that we continue to consult closely with our ally and friend on ways 

forward in light of these developments. During my meetings with Israeli officials 

over this past weekend, I found they largely share our goals and concerns. In the 

broader international context, together with our Quartet partners, we have outlined 

a strategy based on both principle and pragmatism. The January 30 Quartet statement expressed our belief that the Palestinian people have the right to expect a new 

government to address their aspirations for peace and statehood. With governing 

comes responsibility. We stated that future assistance to any Palestinian government will be reviewed against that government’s commitment to three principles: 

abandonment of terror and violence, recognition of Israel, and acceptance of previous agreements and obligations. It is not possible to pursue a peaceful life for your 

people while you engage in terrorism, nor is it possible to make peace with a country whose very right to exist you deny. Thus, we have placed the onus squarely on 

Hamas. Hamas will now have to bear responsibility for the decisions it makes and 

face up to the consequences of those decisions, which will shape the international 

community’s approach to issues involving the Palestinians and regional peace-making efforts. 

Until a new government is formed, we are cooperating with the international community to facilitate the work of the caretaker government. In the last month, we 

have worked with Arab governments and the international community to stabilize 

the finances of the Palestinian Authority until the new government takes over. In 

December Saudi Arabia and Qatar pledged additional support for the PA, and more 

recently Russia has done so. We continue to maintain close contacts with President 

Abbas and Acting Finance Minister Jihad Al-Wazir to maintain the financial viability of the caretaker government. 

17

The Hamas victory has necessitated a thorough interagency review of our assistance program for the Palestinians, which is diverse. As this committee knows, most 

U.S. assistance has been provided directly to the Palestinian people, through NGOs 

and contractors. Our review encompasses each and every USG assistance effort involving the Palestinians, and includes any assistance provided to the Palestinian 

Authority itself. The work of this review is well advanced, and we expect to be able 

to recommend ways forward to our senior leadership in the days to come and to receive their guidance. I can say that as part of that effort, we have already requested, 

and the Palestinian Authority has agreed, to return the unexpended balance—in excess of $45 million—of funding provided last year for new infrastructure projects in 

Gaza. 

Let me briefly outline the principles that are guiding this review. First, we have 

not, do not, and will not provide assistance to Hamas—in government or out of government. Second, because it serves important U.S. national interests, we are looking 

for ways to continue to help the Palestinian people, particularly through provision 

of assistance to help meet basic humanitarian needs. Third, our policy will be logical 

and consistent in order both to send a clear signal to the Palestinians of our expectations, and also to secure the support and emulation of an international donor community which provides considerable Palestinian aid. Finally, we will ensure full consultation with the Congress and with key regional interlocutors once our review is 

completed. 

We have encouraged our neighbors in the international community to similarly 

review their assistance efforts, based on the principles set forth by the Quartet. The 

international community has a critical role to play as we move forward, and we are 

working to ensure that Hamas receives the consistent message that it must commit 

to the principles of ending violence and terror, recognizing Israel, and accepting previous agreements. 

It is important to remember that the Palestinian people’s aspirations to live in 

peace remain strong. Although Hamas won a majority of seats in the PLC, it won 

those seats on the basis of a narrow plurality of votes. Hamas was able to turn that 

narrow plurality of popular votes into a larger number of seats due to its superior 

organization during the election and idiosyncrasies of the bloc voting system used 

in the elections. Opinion polls and detailed analysis of the balloting suggest the vote 

for Hamas was more a protest against Fatah’s governance record than a vote of support for Hamas’ political agenda. We continue to believe the Palestinian people support the policies of President Abbas, whom they elected on a platform of peace just 

over a year ago. President Abbas made clear in his speech on February 18 that he 

expects the future government to accept previous agreements and obligations between the parties and adhere to a negotiating process with Israel aimed at a twostate solution. 

The challenge we will face in the coming months is to continue to demonstrate 

to the Palestinian people that their interests and aspirations are best served by supporting those who share a vision of the path of peace. It will be important for us 

to maintain contact with and support moderate Palestinian voices. Democracy is a 

right, but elected officials must act responsibly and accept the consequences of their 

decisions. Elections do not wash away all sins. Hamas was responsible for dozens 

of suicide bombings in the past decade, and by its own statements, the current 

‘‘calm’’ is only a tactical lull. It is up to Hamas to embrace change to better pursue 

achievement of the desires of the Palestinian people to live in peace or to take responsibility for the consequences of its failure to do so. You cannot deliver a peaceful 

and better life for your people if you are not committed to peace. 

Thank you, and I will be happy to take your questions.

Chairman HYDE. Thank you. Mr. Kunder? 

STATEMENT OF THE HONORABLE JAMES R. KUNDER, ASSISTANT ADMINISTRATOR, BUREAU FOR ASIA AND THE NEAR 

EAST, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT 

Mr. KUNDER. Thank you, Mr. Chairman. I want to echo David’s 

comments and appreciation for your statement, Mr. Lantos, Ms. 

Watson, and others about the staff who were killed in Pakistan. I 

was just on the phone with our USAID mission director there. 

Many of those folks are working around the clock right now to do 

earthquake relief, and so they will very much appreciate the 

thoughts of the Congress, and I will certainly pass those on. I espeVerDate Mar 21 2002 10:38 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6601 F:\WORK\FULL\030206\26332.000 HINTREL1 PsN: SHIRL
18

cially appreciate your mentioning Mr. Achmed, the local employee 

who was killed, because we do have very, very many dedicated 

Pakistani and other employees around the world as part of our Embassy teams. 

I would just summarize very briefly my statement. There were 

three main points I tried to make in the statement. Number one, 

I was asked by the Committee explicitly to talk about the humanitarian situation in the West Bank and Gaza, and as the Chairman 

mentioned and as other Members mentioned, the situation has deteriorated significantly in the last 4 years, both in terms of per capita income, in terms of health indicators of the general population, 

including children; in terms of the amount of disposable income 

that Palestinians have available; in terms of nutritional status. Because of the Intifada and the related closures, the overall humanitarian situation in the West Bank has become dramatically worse 

in the last 4 years. For example, in the Gaza strip, unemployment 

now exceeds 50 percent, which is obviously a contribution to some 

of the political attitudes in the region. 

The second point I made, and just to back up what David said, 

because there have been a lot of comments this morning so far 

about aid to Hamas, I want to make it very clear that we take very 

seriously our responsibility, as defined by the Congress, to oversee 

the U.S. taxpayers’ dollars. While we are not perfect, we are making every effort to ensure that not one single dollar of taxpayers’ 

money goes to Hamas or to any other foreign terrorist organization. 

We have in place a multilayered system to vett the individuals 

and organizations who receive assistance from the U.S. Government, to require a certification from every organization we work 

with, to have a detailed set of audits by our inspector general on 

how we spend the money, and to the extent possible under the security circumstances that prevail on the ground, to get Americans 

or Foreign Service employees out to look at the projects, lay eyes 

on the projects to make sure that the dollars are being spent for 

what they were intended to be spent for. 

The system is not perfect. We are striving for 100-percent perfection, but it is a very carefully monitored system to ensure that not 

a single dollar goes to Hamas as an organization or any of its representatives, and as David said, we will continue to try to make 

that system as foolproof and as tight as possible. 

The third point I wanted to make is just to go over very briefly 

with the Committee, and this is the one slide I presented here of 

the pie chart, to give a quick overview of exactly what the U.S. foreign assistance program in the territories consists of right now. It 

is because of our strong U.S. Government support for the peace 

process and for Gaza disengagement, it is a multifaceted program. 

Starting in the upper-right quadrant, from 12 o’clock o’clock to 2 

o’clock, about 14 percent of the foreign assistance goes to economic 

growth. This is micro-enterprise loans to Palestinian women. It is 

support for the Palestinian Marble Association, a private sector 

business group, to increase marble exports and job creation in the 

West Bank. It is those kinds of economic activities. 

The pink, democracy-in-governance slide, about 8 percent of 

United States foreign assistance goes for helping run the elections, 

to help create an independent supreme court in the Palestinian terVerDate Mar 21 2002 10:38 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6601 F:\WORK\FULL\030206\26332.000 HINTREL1 PsN: SHIRL
19

ritories, to support municipal governments as opposed to the Palestinian Authority itself, and to support civil society organizations—

lawyers’ associations, women’s associations, and so forth—to create 

an effective voice for the Palestinian people to lobby their own government. 

About 7 percent of the money, the yellow, goes for health care 

in the territories. 

About 8 percent goes for education, and this includes building 

local schools. It includes scholarship programs for Palestinian 

youth to attend school in the United States and also to attend Palestinian universities, focused on the poorest and most isolated 

parts of the population. 

About 29 percent goes for water and other infrastructure 

projects. Obviously, waters, that is to say the supply of drinking 

water and the treatment of waste water, is a critical issue in that 

water-deprived part of the world. The water aquifers obviously do 

not respect the boundaries between the West Bank and Israel or 

Gaza and Israel, so these interventions benefit the Israelis as well 

in terms of water supply and water purity, and obviously the water 

conditions are directly related to the health care conditions in the 

territories. 

Continuing from 7 to 10 o’clock, the border crossings. About 15 

percent of our foreign assistance program is the congressionally 

mandated purchase of scanning equipment for the border crossings, 

both to increase the exports from the territories, most of which go 

to Israel, and to increase Israeli security. So about 15 percent is 

the purchase of American-made security equipment at the border 

crossings. 

And, finally, the last quadrant, the financial assistance, is what 

Ambassador Welch talked about earlier. About 19 percent of our 

assistance up to this point has been in the form of cash transfers, 

obviously discussed with the Congress, to the Palestinian Authority, and it is that money that has been requested back from the 

Palestinian Authority, and we have, as the Ambassador just testified, an agreement by the Palestinian Authority to return the great 

bulk of that money. 

So the picture I want to paint for you is that we have a multivaried foreign assistance program in the territories. Much of it is 

humanitarian in nature, directly benefiting health and water. Others are to reach out to moderate elements like business groups, 

lawyers’ associations, and so forth within the Palestinian community. All of this is done under the very careful vetting procedures 

I described earlier. 

With that, Mr. Chairman, I conclude my testimony and would be 

glad to answer any questions you have. Thank you. 

[The prepared statement of Mr. Kunder follows:]

PREPARED STATEMENT OF THE HONORABLE JAMES R. KUNDER, ASSISTANT ADMINIS- TRATOR, BUREAU FOR ASIA AND THE NEAR EAST, U.S. AGENCY FOR INTERNATIONAL

DEVELOPMENT

Mr. Chairman, thank you for the opportunity to testify on the humanitarian and 

economic situation in the West Bank and Gaza, as well as aspects of the U.S. assistance program. 

Much has taken place since the last time I had the opportunity to brief the committee a year ago on the USAID program in the West Bank and Gaza. Israel successfully completed its withdrawal from the Gaza Strip and four settlements in the 

20

northern West Bank; multiple rounds of municipal elections have been held; and 

most recently the Palestinian legislative elections took place. The results of the parliamentary elections will undoubtedly have implications for U.S. foreign policy and 

for the U.S assistance program to the Palestinian people. I would like to begin my 

testimony outlining the current economic and humanitarian situation on the ground 

today. 

Through four years of the intifada, Palestinians have faced considerable hardships, including a decline in employment opportunities and disposable income, and 

a decline in the overall quality of life. Shifting its program to meet those needs, 

USAID helped create jobs, revitalize businesses, build roads and water infrastructure, and meet the health care and nutrition needs of the most vulnerable. However, 

significant challenges remain. 

The economic situation in the West Bank and Gaza has shown some improvement 

over the past year. The primary reasons for this modest growth are an increase in 

public expenditures; increased demand from Israel for Palestinian export merchandise and labor; a relaxation of border restrictions and closures; an increase in credit 

provided to private sector businesses; and an increase in donor disbursements. The 

Palestinian economy, however, continues to perform much below its potential with 

per capita incomes remaining some 29 percent below the 1999 level. The legacy of 

four years of conflict during the intifada and continued closures has resulted in significant reductions in personal incomes, exports, investment, production and employment, particularly in Gaza. The Palestinian economy depends heavily on Israel 

for exports, imports, and employment. For example, in the first quarter of 2005 over 

70 percent of imports came from Israel and 10 percent of all employed Palestinians 

were employed in Israel or Israeli settlements. High unemployment; limited trade 

opportunities; and continued closures, as a result of security concerns, both within 

the West Bank and Gaza and externally, have stymied growth. 

Today the Palestinian Authority (PA) is facing an imminent fiscal crisis. In 2005, 

the PA’s budget deficit reached about U.S. $800 million, of which donors outside the 

United States financed $340 million. Short-term borrowing from banks covered the 

remainder. The PA cannot continue this unsustainable practice. Moreover, 63 percent of the PA’s revenue is composed of customs tariffs collected by Israel and then 

transferred to the PA. The Government of Israel has indicated that because it will 

not transfer funds that may become available to Hamas, these transfers will be terminated. This will cause immediate and extreme financial pressures on the PA, particularly in its ability to pay the wages of an estimated 150,000 government employees. 

With respect to the humanitarian situation, poverty is a major problem with 46 

percent of Palestinians living below the poverty level. Income levels have steadily 

fallen since 1999. A growing class of ‘‘new poor’’ exists—families who have lost their 

source of income, have no savings left and have had to sell their private and productive assets. High unemployment continues to be a major concern, leading not only 

to poverty but also to despair and frustration among Palestinian people. Unemployment overall for the West Bank and Gaza is estimated at 23.4 percent compared 

with 10 percent before 2000. Reaching nearly 50 percent, the unemployment level 

in Gaza is much higher than in the West Bank. Of particular alarm is a high level 

of unemployment for youth in both the West Bank and Gaza. 

In addition, many families lack the financial resources and resiliency to provide 

adequately for basic necessities such as food, water, health care, and medicines. It 

is estimated that 37 percent of Palestinians do not have enough food to meet basic 

daily nutrition needs, and one in four children under five is anemic due to poor nutrition. Approximately 2,800 children die every year from mainly preventable diseases, and only one-third of new mothers receive follow-up medical care within six 

weeks after delivery. 

Limited access to potable water and to adequate sanitation increases the risk of 

poor health. Nearly 1.2 million people in West Bank and Gaza, including approximately 200,000 children under the age of 5, lack access to sufficient and affordable 

quantities of safe drinking water. Proper sewage treatment and disposal is nearly 

non-existent outside of the cities of Ramallah, Al Bireh, and Gaza City. Scarce 

groundwater supplies are frequently contaminated by seepage from leaking septic 

tanks and untreated sewage discharges from larger cities. In this context, the relatively high frequency of diarrhea among children under five—18 percent in any two 

week period—is not surprising. Frequent episodes of diarrhea can contribute to malnutrition and diminished learning abilities, and have an overall negative impact on 

childhood development. The humanitarian situation in the West Bank and Gaza is 

likely to deteriorate even further in the near future, with an expected decrease in 

donor flows. 

21

Given the political and logistical realities on the ground, managing the U.S. assistance program in the West Bank and Gaza has many challenges. As guardians 

of U.S. taxpayers’ money, we pay particular attention to the appropriate and secure 

use of foreign assistance funds. In order to ensure that no U.S. government resources fall into terrorist hands, USAID has developed an extensive system of safeguards, monitoring, and evaluation to make sure the aid program in the West Bank 

and Gaza is completely transparent and accountable. 

The first step of this process is the formation of a cohesive strategy for development projects in the West Bank and Gaza that meets U.S. foreign policy objectives 

while at the same time responds to the needs of the Palestinian people. In developing this strategy, USAID undertakes extensive reviews of previous projects and 

holds consultations with a wide variety of stakeholders including the Government 

of Israel, other governments and donors, locally based non-governmental organizations (NGOs) and other representatives of the Palestinian people. The majority of 

USAID funds are awarded through a full and open competitive procurement process 

to implementing partner organizations and individual aid recipients. This open competition ensures that our taxpayers and ultimate beneficiaries receive the best goods 

and services available. 

USAID implements several formal anti-terrorism measures including: vetting; the 

anti-terrorism certification; and mandatory clauses reminding contractors and 

grantees of their legal duty to comply with applicable anti-terrorism laws and regulations. Before making awards, USAID requires all U.S. and non-U.S. organizations 

to certify that they do not provide material support or resources for terrorism. This 

‘‘Anti-Terrorism Certification’’ applies to all first-tier and second-tier assistance recipients and has been in effect since 2002. All NGOs that receive USAID funds are 

required to sign this certification. All contracts and grants also contain a mandatory 

clause reminding awardees of their duty to comply with U.S. laws and Executive 

Orders prohibiting assistance to terrorist organizations. 

Since 2001, USAID has vetted recipients of U.S. assistance. The vetting process 

involves the personal knowledge of USAID and other staff and searches of databases 

maintained by other U.S. government agencies, including the Embassy in Tel Aviv 

and the Consulate General in Jerusalem. Among other things, this review includes 

checking the list of parties excluded from federal procurement and non-procurement 

programs (suspended/debarred list) and checking the Office of Foreign Assets Control specially designated nationals and blocked persons lists. USAID also vets beneficiaries if there is any reason to believe that the beneficiary of such assistance commits, attempts to commit, advocates, facilitates or participates in terrorist acts, or 

has done so in the past. 

Once an award has been made, USAID has established procedures to safeguard 

U.S. investments and ensure the transparency and integrity of U.S. assistance. In 

order to ensure that funding through local and U.S. NGOs is used only for agreed 

upon purposes, all NGOs are required to submit quarterly financial reports to 

USAID on how funds are spent. Also, all significant grantees and contractors’ local 

costs are audited by USAID’s Inspector General on an annual basis. In this year 

alone, the Inspector General audited 80 grantee and contractor awards. In addition 

to these annual audits, a Congressionally mandated Government Accountability Office audit is also underway. 

During the course of program implementation, a comprehensive monitoring and 

oversight process enables us to assess the impact of programs and to verify contractor and grantee reporting. Given the difficult security and border crossing conditions, USAID has developed assistance interventions that can be effectively monitored by foreign service national staff in West Bank and Gaza, with some assistance from partner organizations. USAID also relies on the use of a Geographic Information System for the West Bank and Gaza program to track the progress of program activities as well as provide spatially oriented, political and socio-economic 

analysis. 

Following Gaza disengagement, USAID programs provided critical assistance to 

help reinvigorate the Palestinian economy and make disengagement a success. Examples include: the rehabilitation of greenhouses and packing facilities preserving 

4,000 jobs and revitalizing the flow of agricultural exports to Israeli and global markets; provision of scanners to expedite cargo traffic at key border crossings; construction/rehabilitation of schools and roads, which also provided much-needed employment opportunities; disbursement of home improvement and micro business 

loans; and improvements to water treatment and distribution. All told, these and 

other programs benefited hundreds of thousands of Palestinians. 

Also following disengagement, USAID sought opportunities to promote support for 

a peaceful, prosperous, independent Palestinian state. USAID developed and carried 

22

out projects that assisted President Abbas in getting a message out to the Palestinian people about peace, democracy, and development. 

Recent polling data demonstrates that USAID’s outreach campaign led to an increase in public awareness of the contributions of the American people to the Palestinian people. Of the 46 percent of the Palestinian population who saw the USAID 

outreach campaign, 50 percent are now aware and appreciative of the contributions 

of the American people. Seventy-five percent of respondents regard USAID projects 

as important for their well-being and 49 percent say these projects boost their positive attitude toward the United States and its people. 

On January 25, 2006, the Palestinians held what is widely viewed as free and fair 

elections. The elections resulted in a change of power that clearly will have implications for the U.S. assistance program in the West Bank and Gaza. The U.S. government cannot and will not provide funding that benefits Hamas, which is a designated foreign terrorist organization. We are currently engaged in a review of our 

policy and a comprehensive review of our assistance programs. The scope of U.S. 

assistance is quite extensive with a wide range of programs that address basic 

human needs, engage moderate elements in society, defuse inter-ethnic and interreligious tensions, support private sector revitalization, and build basic infrastructure. In our view, U.S. assistance still has an important role to play in the West 

Bank and Gaza to meet basic needs, to mitigate suffering through humanitarian 

and other assistance, and to maintain engagement with moderate elements. USAID 

can continue its work with non-governmental and international organizations so 

that more Palestinian families have access not only to basic food, clean water and 

healthcare, but also to employment and income generation opportunities and to assistance that promotes moderate views and progress towards the objectives of the 

Road Map. We will remain vigilant, Mr. Chairman, continuously reviewing and 

strengthening our safeguards, to assure that such funds go only to organizations 

that do not support violence or terrorism, and to assure that no U.S. funds flow 

through, or provide any benefit to, Hamas.

23


26332a.eps
24

Chairman HYDE. Thank you very much. 

General Dayton? 

STATEMENT OF LIEUTENANT GENERAL KEITH W. DAYTON, 

UNITED STATES SECURITY COORDINATOR, U.S. DEPARTMENT OF STATE 

Mr. DAYTON. Thank you, Mr. Chairman, and I appreciate the opportunity to address the Committee today. I am just going to highlight a few things that appear in my statement, so I hope everyone 

had a chance to take a look at it. 

Let me start off by saying that it is quite clear that the seismic 

shift in Palestinian politics produced by the January elections will 

have profound consequences for the security sector, but I will tell 

you I think it is still too early to know exactly how those will play 

out. What we do know, of course, is that prior to the elections, the 

performance of the Palestinian security forces was disappointing in 

almost every respect; in confronting terrorists, in collecting weapons, and in consolidating and right-sizing their forces. This ineffectiveness of the Palestinian security forces led the Israelis to conduct unilateral actions in their own defense. 

There were a few bright spots. There was good cooperation between the Palestinian security forces and the Israeli defense forces 

on Gaza disengagement. Good cooperation also occurred during the 

Palestinian elections, and there is pretty good daily cooperation between the IDF and the Palestinian security forces on the ground 

in the West Bank today. 

I would also note that the predicted internal violence during and 

post the Palestinian elections did not occur. Nevertheless, the current United States support to the Palestinian security forces is 

clearly under review. 

The Hamas election victory complicates the future efforts at Palestinian security sector reform. It is well-established policy that the 

United States will have no contact with Hamas or any security 

agency controlled by Hamas, and I am quite aware of that policy, 

and I am in total support of that policy. 

Nevertheless, we have to also keep in mind that security sector 

reform is the foundation upon which any long-term success in the 

Palestinian area will be built. The majority of Palestinians and 

Israelis want peace, and as I said, Palestinian security reform is 

central to carrying out that process. 

As a result, my team, which is a relatively small, international 

team, hopes to continue its mission of monitoring and advising on 

Palestinian-Israeli security coordination and, if it turns out to be 

possible, on Palestinian security forces’ reform. Nevertheless, we 

are currently at a crossroads where the Palestinians themselves 

will either have to move forward on disarmament and security consolidation or face confrontation and potential chaos. 

Let me note, in closing, that I am convinced that only the United 

States can lead the effort for Palestinian security reform. I have 

worked hard in the past weeks to establish credibility with Israelis, 

Palestinians, quartet members, and the international donor community. My team has the outlines of a campaign plan to guide our 

efforts, but we must have a capable partner committed to peace. 

Hamas’s failure to accept the principles established so far by the 

25

quartet will halt any ability we have to make progress, and decisions made by a Hamas-run Palestinian Authority Government 

may very well derail our efforts. 

While we must now clearly wait and see how the situation ultimately unfolds, I would encourage all of us to be cautious before 

we rush to the conclusion that the effort is simply not worth it. As 

I said earlier, security sector reform remains fundamental to 

achieving a Palestinian state at peace with its neighbors and responsive to the needs of its people at home. 

Thank you, Mr. Chairman, and I will be glad to take any questions. 

[The prepared statement of Mr. Dayton follows:]

PREPARED STATEMENT OF LIEUTENANT GENERAL KEITH W. DAYTON, UNITED STATES

SECURITY COORDINATOR, U.S. DEPARTMENT OF STATE

Thank you, Mr. Chairman. I appreciate this opportunity to address the committee 

today. 

It is quite clear that the seismic shift in Palestinian politics produced by January’s PLC elections will have consequences for the security sector, although it is still 

too early to know exactly how they will play out. 

Let me first address the past and current security situation. As we all know, before elections, the level of activity and performance of the Palestinian leadership 

and security forces in confronting terrorists, collecting weapons, dismantling terrorist organizations, and consolidating and right-sizing the security sector was disappointing. I believe it was well-understood by Fatah that the future of security reform programs and international assistance rested with progress against these 

benchmarks, and that inaction would jeopardize future international support. Yet 

the pre-election campaign environment, the obstacles on the political and economic 

tracks, and the lack of political will resulted in little progress in either security sector performance or reform. There had been sporadic, localized, internal PA security 

cooperation. However, such cooperation was not the norm and tended to evaporate 

quickly due to the PA’s internal political crisis. And this ineffectiveness tended to 

reinforce the Israeli propensity to operate unilaterally in self-defense. 

There were some bright spots, which bear mention. Israel’s disengagement from 

Gaza and parts of the northern West Bank went forward in a secure environment 

and with a great deal of on-the-ground coordination between the Israeli Defense 

Forces and the Palestinian Authority security forces (PASF). The international 

crossing at Rafah opened in late November under carefully negotiated security arrangements and with the essential support of the EU’s Border Assistance Mission. 

And, despite an uptick in lawlessness and numerous warnings of violence on election day, the legislative elections went forward without a hitch in a safe, secure, and 

free environment. 

In addition, fears of post-election violence have not, so far, been borne out. Under 

the current caretaker government, the security services remain more or less in place 

while the victors and the opposition sort out the political arrangements. On the 

ground, we see some continuing examples of local cooperation between the Israeli 

Defense Forces and Palestinian Security Forces as they continue to grapple with the 

necessities of daily life. In other words, caution and deliberation seem to be prevailing, at least for the moment. And my team and I continue to build upon the efforts started by General Ward to work with the parties and key regional actors to 

support that stability so that the political and diplomatic levels have time and opportunity to do their work. I want to particularly note contributions of the Government of Egypt, which has made determined and effective efforts to maintain the 

current state of calm. 

With this in mind, we are of course following suit with the other arms of the U.S. 

Government in reviewing our program and approach in light of Hamas’ victory. To 

date American support for the PASF has focused on advice and guidance to support 

their own efforts at reform, while playing a coordinating role with the other prospective security donors. For example, under the excellent leadership of General Ward, 

our team worked with the PA’s Ministry of the Interior back in the fall to launch 

a ‘‘white paper’’ process that would help define a Palestinian National Security 

Strategy and the missions, roles, and responsibilities of the PASF. We have also had 

an active role in following up on November’s Agreement on Movement and Access, 

including the EU’s work to resolve concerns and complaints about the operations at 

26

Rafah. While we did provide non-lethal equipment to the PASF in the fall to help 

maintain stability after Israel’s disengagement, and worked with other donors—and 

with Israel—to meet other Disengagement-related non-lethal needs of the PASF, we 

have refrained from launching any larger-scale program while we sought to understand the scope of the challenge and the necessary next steps. 

Prior to the elections, when looking at the question of broad-based security sector 

reform, it had become clear to me that future efforts would need to go beyond advising and consulting and more on assertive action to function as a ‘‘change agent’’ in 

advancing reform. It was also clear that any effort of ours or of the international 

community’s would be inseparable from the need for a strong, political-level decision 

by the Palestinian Authority to move unequivocally away from confrontation with 

Israel and towards a proper role of protecting Palestinian civilians and preventing 

terror. 

Obviously Hamas’ election victory throws these conclusions into question. All 

agree that Palestinian Authority security performance is key to any progress along 

the Roadmap and towards the two-state solution. I feel strongly that, in the longterm, effective Palestinian Authority security performance will require broad-based 

security sector reform—in terms of mandate, structure, personnel, training. 

Progress on security sector reform, however, is contingent on there being a Palestinian Authority Government in place with which we can work. This of course depends on whether or not the new government chooses to accept the principles that 

the international community has set out for it. While the Palestinian Authority 

Presidency might very well continue to maintain its authority over some, or perhaps 

even all, of the PASF, it is a very complicated legal and policy question of whether 

we could continue to work with those elements. My team is studying the options 

and working in close consultation with our diplomatic missions in Jerusalem and 

Tel Aviv and of course with the policy level in Washington as to where we go next. 

The majority of Palestinians, Israelis, and the international community continue 

to aspire to the two-state solution, and that future state of Palestine would need 

effective security forces. Working with Palestinian civil society—on ideas related to 

national security strategy, demobilization of militias, and the inculcation of democratic, civilian governance of security forces—could be one direction. Similarly, it is 

worth considering what the security architecture of a future Palestinian state 

should look like. There is little reason to think that it should resemble the Arafatera structure of duplicative roles and competing forces. Clearer role definition, consolidation of services, and right-sizing are only some of the elements that need to 

be seriously considered in any planning effort. 

Regardless of what we can do now or in the near future on the subject of PA security sector reform, importantly, the USSC team would hope to continue to monitor 

and advise on Israeli-Palestinian security coordination, an important component of 

the Roadmap and crucial to maintaining any hope of avoiding a major humanitarian 

disaster. 

We are clearly at a crossroads. Until now, PA inertia, political squabbling, and 

campaigning have stood in the way of a clear and strategic decision to move forward 

with immediate security action and longer-term, broad-based reform. Palestinian political will—not capacity or capability—has been the primary obstacle to security action. Now we add all the uncertainty and complications of a Hamas-led government. 

With the elections behind us, the Palestinians and their leadership are now forced 

to confront a stark choice: implement Abu Mazen’s prior commitment to disarm militias, consolidate and reduce security personnel, and move forward with security 

sector reform through peaceful means. Or choose continued confrontation and potentially chaos. 

Let me note in closing that I am convinced that only the United States can lead 

the effort for Palestinian security sector reform. I have worked hard in the past 

weeks to establish credibility with the Israelis, Palestinians, Quartet partners, and 

the international donor community. We have the outlines of a campaign plan to 

guide our efforts. But we must have a capable partner, committed to peace. Hamas’ 

failure to date to accept the principles established by the Quartet halts our ability 

to make any progress, and the decisions taken by a Hamas-run PA government may 

derail our efforts. But while we must now clearly wait to see how the situation 

unfolds, I encourage us all to be cautious before we rush to the conclusion that the 

effort is not worth it. Security sector reform remains fundamental to achieving a 

Palestinian state at peace with its neighbors and responsive to the needs of its people at home. 

Thank you, and I will be happy to take your questions.

Chairman HYDE. Thank you, General. 

We now go to the 5-minute rule, and Mr. Lantos is first. 

27

Mr. LANTOS. Thank you very much, Mr. Chairman. I want to 

commend all three of our distinguished witnesses. I have some very 

simple and specific questions, gentlemen. 

General Dayton, I would be grateful, as I know my colleagues 

would, if you would tell us what has been the flow of weapons into 

Gaza following the Israeli withdrawal from there. I particularly 

want to ask you to comment on what happened during the tribal 

violence on the Rafah border early in January and during the cartoon disaster during which, as I understand it, French and Danish 

contingents did not perform their responsibilities. I would like to 

ask you what weaponry has been smuggled into Gaza and from 

Gaza to the West Bank. 

If I may turn to Mr. Kunder, you have indicated repeatedly, and 

I commend you, that no dollars have gone, or will go, to Hamas as 

an organization. The question is no longer that. The question is, as 

Hamas takes over the Palestinian Authority, as long as Hamas is 

in control, the legislation that Ms. Ros-Lehtinen and I are sponsoring insists that no dollars go to the Palestinian Authority controlled by this terrorist organization except food, medication, and 

water. 

And, finally, Mr. Ambassador, I would like to ask you to comment on the Ros-Lehtinen and Lantos legislation. We intend to 

move on this expeditiously. We would like to work with the Administration, and we very much hope that the Administration will not 

paint itself into a corner, such as it did on the port controversy. It 

was an embarrassing spectacle yesterday watching you and three 

of your distinguished colleagues deal with a situation that simply 

was beyond your capability to deal with because the position you 

were defending was an unacceptable position. General Dayton? 

Mr. DAYTON. Thank you, Congressman. Let me try to be fairly 

brief. First of all, on the flow of weapons into Gaza, it is certainly 

an area that has us concerned. We have talked with both the Egyptians and the Israelis for their assessment of how this is going. The 

Israelis have given us some information, which we have shared 

with the others who control the border, and the Israelis, I think, 

are more comfortable now than they have been, but they are still 

very concerned, and it is an area that I will discuss personally 

when I go to Egypt next week with the appropriate Egyptian authorities. 

I am more concerned, however, on Rafah because my view of 

what is happening in Rafah may not be quite what your view is. 

I would tell you that we have processes in place at Rafah to make 

it stronger. As a matter of fact, on the ninth of March, I will chair 

a council that will include Israelis, Palestinians, and Egyptians to 

refine our procedures at the border, but I do have to tell you that 

the European Union monitors are actually doing a pretty good job. 

Even my Israeli colleagues would tell you that they are not doing 

as badly as they are kind of being reported as doing. 

They are doing a pretty good job, and the Danes and the French, 

first of all, they only have two or three members of those countries 

present. I spoke to both of these individuals after the cartoon controversy. Sir, they stayed on their jobs. They did not flee. They did 

not go anywhere. And the European monitors are doing, I think, 

as I said, a satisfactory job. General Pistolese, the Italian 

28

Carabinier chief down there, and I are in constant communication, 

and Rafah may actually be something that, in the future, we will 

look at and say, we worked this out pretty well. Thank you, sir. 

Mr. LANTOS. Thank you. 

Mr. KUNDER. Mr. Lantos, I completely agree with what you just 

said. I was exactly trying to draw that distinction, that the issue 

is now what we are going to do vis-a-vis the Palestinian Authority. 

Ambassador Welch is leading the interagency discussion on that, in 

which we are participating, so I think I would turn to him for further clarification. 

Mr. WELCH. Congressman Lantos, thank you. First, with respect 

to the question that you directed to me, we, of course, would welcome working with you, sir, and other Members of the Committee 

on any legislative approach, including the one that is in draft now, 

to address these issues. As you know, I am available at any time 

to work on this or any other matter under your purview. 

Sir, as Jim Kunder just mentioned, traditionally we have not 

provided much direct support to the Palestinian Authority, the government, per se. Several days ago, as Secretary Rice announced 

here at the Congress, we asked the Palestinian Authority to return 

to us whatever was left unexpended of the direct assistance that 

had been provided in the past. There are two tranches of that 

where there are dollars remaining, Mr. Lantos. One is from some 

years ago. I think it is $75,000 left. The other amount is much 

more considerable, near $50 million, which was provided in support 

of Gaza disengagement last year in order to better the conditions 

in Gaza. The bulk of that money is unexpended. 

We asked for it back, and we have been talking to the Palestinian Authority about the delivery of that back to us. Yesterday, 

we received the $76,000 returned and two-thirds of the remaining 

amount, $30 million, was also returned to us yesterday. We are 

talking with them about schedule for the return of the remainder. 

I expect to accomplish that, Mr. Lantos, before a new government 

takes over. 

So as far as direct assistance to the Palestinian Authority Government, per se, there should be, by the time this interim, caretaker government leaves office, no United States taxpayer dollars 

in their hands. The amounts may differ from what we contributed 

because, of course, some money has been spent. Contracts have to 

be undone. I am not exactly familiar with that side of the USAID 

business, but that accounts for the difference in the money. 

In the future, as we undertake this review, as I mentioned to 

you, it will be according to several principles. We would expect, 

though I do not have policy decisions yet on this, Mr. Lantos, that 

there will be three consequences for our assistance program, broadly speaking. We will continue assistance in basic humanitarian 

needs and redirect some of the money that we have taken back for 

that purpose. Other activities, sir, we are likely to suspend, and 

there will be some we may well cancel. 

Again, we are going literally line by line through each program 

activity to establish their validity according to the criteria that I 

just mentioned and then make a recommendation to our bosses, 

and we will consult with you in that process, sir. As you know, for 

any redirection of these monies, it does involving notification to 

29

Congress, so you would be able to exercise your oversight responsibilities in that regard. 

Mr. LANTOS. Thank you, gentlemen. 

Chairman HYDE. The Chair seldom asks a question, but I will 

ask one now. About 80 percent of the hospitals and clinics in the 

Palestinian territories are owned by the state, and a cutoff of humanitarian aid, which seems very likely, will have quite an impact 

on those hospitals, all of which underscores the importance of 

Christian missionaries in the territory. I am wondering if, in your 

work, you see the possibility of unfair treatment of these Christian 

hospitals and missionaries on questions of taxation and mobility, 

problems of moving around. Is there such a problem, and are we 

doing anything about it? 

Mr. KUNDER. Mr. Chairman, we are looking at that issue right 

now because clearly one of the things that we are looking at as 

part of the interagency review that Ambassador Welch is leading 

is what portion of what would normally be considered humanitarian or basic needs, like health care, is being done through Palestinian Authority-supported facilities, what percentage is being done 

through NGOs, Christian and others, and what percentage is being 

done through private clinics? We have a pretty good idea of what 

those numbers are. We are trying to get even greater clarity on 

which Palestinian patients go to which facilities. 

The general question you raise is a critical one because if, at the 

end of this, we want to provide medical care as part of the humanitarian assistance to the Palestinian people, we will have to address 

the fact that some significant portion, certainly more than 50 percent, do get basic care from government-run health clinics, and 

they tend to be the poorest of the Palestinian people. 

There are many factors that determine whether Palestinians can 

access adequate health care, including mobility within the West 

Bank. We do not believe, at this point, that any prejudice against 

Christian organizations, per se, is a major factor. We are looking 

at that as well, and we will be glad to get back to the Committee 

with more information. 

Chairman HYDE. Thank you very much. 

Mr. Chris Smith of New Jersey? 

Mr. SMITH OF NEW JERSEY. Mr. Chairman, thank you very much. 

I want to echo the Chairman’s statement with regard to those organizations. I think they do a tremendous service to Palestinians. 

While we have severe—I do, at least, and I know you do as well—

disagreements with Hamas, vulnerable women and children certainly need health care, and certainly these NGOs or PVOs, many 

of them are Christian, some of them are not, due provide a valuable service. So the sooner that review can be done, I think, the 

better so we know how we can beef up those actions so that a benign entity gets it rather than one that has an agenda that includes the destruction of Jews in Israel. 

Let me also ask you all to respond to that further, if you would 

like. Mr. Kunder, you might want to speak to the issue of UNRWA. 

You know that I have spoken about that, and you as well, many 

times in the past. Hamas had disproportionate influence on 

UNRWA in the past, especially with regard to the textbooks and 

30

the anti-semitic language contained within those textbooks. Where 

do we go now with UNRWA going forward? 

General Dayton, regionally, how is the United States working 

with friends and allies like Jordan and Egypt, and with the Arab 

summit now going to be held in, of all places, Khartoum, Sudan, 

what is likely to come out of that summit? So we have any sense 

vis-a-vis Hamas? 

Again, Ambassador Welch, you might want to touch on the issue 

of the NGOs as well because these services are vital, and as Mr. 

Hyde pointed out, we are concerned that there may be a move to 

unduly and unjustly tax those who are providing these vital services, which would be absolutely counterproductive to the most vulnerable of people in these areas. 

Mr. KUNDER. First of all, we share your sense or urgency, Congressman Smith. The meeting is going to be held tomorrow morning in Tel Aviv. We have invited the international organizations, 

like UNRWA and the U.N. agencies, the NGOs working in the 

area, and so forth, to get a clearer picture of what everyone who 

is capable is doing as part of this review that Ambassador Welch 

is leading. 

The education issue is one of those that I think it is part of the 

interagency review that is taking place for the very reasons you 

have stated. As we go through these issues, we are trying to understand where we have been able to have an influence on moderating 

things like the content of textbooks, and then recognizing the need, 

as the Ambassador said, to send a clear, consistent message to the 

new Hamas government of nonsupport, how do we continue to have 

some influence on issues like textbooks because this is the classic 

case on which we obviously will be consulting extensively with the 

Congress on engagement versus disengagement? We want to send 

a clear signal, but these are the kinds of issues where we have 

been able to have some influence in the past. We will get a better 

understanding tomorrow of what the NGOs will be able to continue 

to do on their own, but we will have to grapple with whether we 

are going to continue to deal with the Ministry of Education itself. 

Thank you. 

Chairman HYDE. Mr. Berman? 

Mr. SMITH OF NEW JERSEY. Mr. Welch, Ambassador? 

Chairman HYDE. Is Mr. Berman gone? 

Mr. WELCH. Mr. Smith, would you like me to answer your question? 

Mr. SMITH OF NEW JERSEY. If the Chairman will permit it, if I 

have still got time. 

Chairman HYDE. I am sorry. Go ahead. 

Mr. WELCH. Excuse me, Mr. Chairman. 

You had asked, sir, about the Arab League summit in Khartoum. 

Let me take the opportunity to not only answer that but broaden 

it a little bit to speak about our overall diplomatic approach to this 

issue, which has been quite complex and vigorous in the last 

weeks. 

First, there is no Hamas government formed yet, so I do not 

know exactly what issues might be on the table for the members 

of the Arab League to look at at their meeting in Khartoum, but 

I would expect that there is going to be a discussion. Our approach 

31

to that or any other international event, for example, an invitation 

to Hamas representatives by a foreign government, or even if we 

hear of such an invitation that might be happening—we have already gone out worldwide to inform our Embassies of what our approach and position is. 

First, on contacts with Hamas, as you know, of course, we consider Hamas a terrorist organization, but our laws are not replicated by other countries. Nevertheless, we urge them against contact because, in our view, isolation and pressure ought to be the 

words of the moment. 

Second, if they, nonetheless, want to have such contacts, for 

whatever reasons, we would bring to their attention the quartet 

principles, the three things that we have all enumerated here, and 

explain the logic of those—they are self-evident in nature—so that 

whoever is meeting with these people will try and impress upon 

them their responsibilities. Again, we do not answer for foreign 

governments, but in terms of communicating our position, it is very 

forthright. 

It already has been done with Arab League members individually. This was a centerpiece of Secretary Rice’s trip to several of 

the Arab League countries just in recent days. But before the summit itself, we will go back again to each one of these countries and 

make sure that we are up to date with our position. 

In terms of the NGO community and its concerns, both mentioned by the Chairman and yourself, sir, we are very attentive to 

the interests of the PVOs and NGOs in trying to do their job and 

help people at risk. This is a complicated subject for them, too, and 

they want to spend privately raised money in a responsible way, 

I am sure. We have had a number of meetings with them. We are 

going to continue that process because they have some concerns 

that are particular to their work, which is a bit different than government work. 

Finally, we have been involved, and we are continuing as we 

speak, and one of the reasons Ambassador Mark Ott is here in 

Washington today is we are also talking with other foreign governments and the European Union about how we implement the next 

phase of the quartet’s conditions; that is, once there is an Hamasled government, what do we then do? As I said in my prepared remarks, we would like other governments to take a look at our example and our leadership and perhaps emulate some of our practices, again, the purpose being to get these people to agree to those 

three conditions, and if they do not, to make their ability to function as a government enormously difficult. 

Mr. DAYTON. Mr. Chairman, Mr. King had asked me a question, 

too. Would you like an answer or to pass? 

Chairman HYDE. Absolutely. 

Mr. DAYTON. Okay. Very quickly. I can be very brief. Congressman, I appreciate the question because it is an important one. 

I and my team are in close contact with the Egyptians and the 

Jordanians and others in the region. The Egyptians, in particular, 

have been playing a very vital role. Not only did they facilitate the 

Cairo Agreement last March, which led to the calm among the various factions, but on the ground, the Egyptians have worked very, 

very intensively with Palestinian Authority security forces in Gaza, 

32

under very hazardous conditions, I must tell you, to try to reshape 

the security sector and maintain law and order, and, of course, 

more recently, the Egyptians have been in the lead in trying to 

press Hamas to change its policies. 

As you know, the secretary and Mr. Welch recently went to Cairo 

and Riyadh. I have been to Cairo already. I am going back again 

next week, and before the end of the month, I will travel to Jordan 

as well, so thank you, sir. 

Chairman HYDE. Now, Mr. Berman, California. 

Mr. BERMAN. Thank you, Mr. Chairman. I would like to ask 

three questions, so I would appreciate it if you could allot the time 

so that all three could get a response. 

First, Ambassador Welch, you briefly touched on your desire to, 

even after an Hamas government is seated, continue dialogue and 

activity with the President of the Palestinian Authority who you 

appropriately refer to as a man who has spoken on behalf of peace. 

He has laid out, at different times, some conditions for the new 

government, but once this government is seated, and even though 

the conditions that he has spoken about have not been met, and 

even though he has not taken control of all of the security forces, 

I would like you to defend the logic of continuing dialogues, discussions, and work with the office of the President of the Palestinian 

Authority versus the impression that I think a lot of people would 

have that, in effect, we are recognizing the existence of a two-headed government that undercuts this effort to pressure Hamas to 

agree to the three conditions that have been laid out. 

Secondly, I would like to ask, just to clarify what may have been 

an impression here that the European Union has decided to give 

financial assistance to an Hamas-led government. That was not my 

understanding. Are we off going in different directions in the EU 

on this already? Your comments would indicate that you do not 

think so, so I would like to just clarify this issue of what that announcement of assistance was. 

And, third, Mr. Kunder, particularly, given that our USAID employees cannot go into Gaza, that there are many parts of the West 

Bank we do not want them to go into, realistically, once an Hamas 

government is seated, what are these layers of review and auditing 

and control that keep things from becoming essentially humanitarian programs controlled by Hamas, diverted to Hamas? You do 

not have the kind of access to the on-the-ground help that seems 

to be an integral part of conducting that review. How do you do it? 

Mr. WELCH. Mr. Berman, sir, let me take a stab at your first two 

questions. 

With respect to our position vis-a-vis the office of the President 

in the person of President Mahmoud Abbas, our policy decision, 

and agreed with the quartet, is clear. We intend to maintain contact with the interim government under his leadership until a new 

government takes charge. We do not know yet when that will happen, and we do not know who will be in it. 

The logic of dialogue with the President of the Palestinian Authority—he presents a position of sharp contrast with those who 

have been elected in the PLC. That was evident in a speech he 

made. It has been evident in his positions that he articulated when 

he ran for President. On the basis of those positions, he has been 

33

invited here to the United States twice. We think he represents an 

intention to pursue a negotiated peace based on a two-stage solution, to do so in an atmosphere free of violence and terror and certainly building on the agreements that were previously agreed. 

So our intent is to have this dialogue with him. Now, that does 

not translate into any decision at this point on any support to the 

office of the President. I want to be very clear about that. As I said 

earlier, our support to the Palestinian Authority Government has 

been on an exceptional basis, and we intend to have all of that returned by the time an interim government takes over. 

Mr. BERMAN. By the time a permanent government takes over. 

Mr. WELCH. That is correct. 

Chairman HYDE. The Chair interrupts to note a vote is on, so we 

will stand in recess until after the vote and then return and finish. 

Mr. BERMAN. Could we just hear the last answers of this witness 

to my question? 

Chairman HYDE. I cannot hear you. What? 

Mr. BERMAN. Could Ambassador Welch and Mr. Kunder just answer the rest of my questions, and then I will be out of your hair? 

Chairman HYDE. You can stay here as long as you want. 

Mr. BERMAN. Okay. Good. 

Mr. WELCH. I will try and be brief on the European Union provision of assistance. My understanding is that they have announced 

the release of some money from the World Bank Trust Fund, some 

money to pay utilities and fuel, and some money to be redirected 

toward UNRWA. This is not to support the next government but, 

rather, is to support the interim government or assistance that is 

redirected. Knowing the budget needs of the current interim government, Mr. Berman, I expect that these monies will be necessary 

to pay their salary bill in the current month, especially since it appears highly unlikely that the Israeli Government will return tax 

revenues to the Palestinian Authority in this current period. 

So I think, while I have not had the chance to go through each 

item with Mr. Ott yet, and I expect to do so tomorrow, I see this 

as consistent with the quartet’s decision to support the interim government, sir. 

Mr. KUNDER. Sir, I do not want to pretend that it is easy, as it 

is some other places. It is very hard to exert oversight, and so we 

try to put extra layers in there. 

Number one, just to reiterate the basic fact, most of the U.S. taxpayers’ dollars is going to either U.S. contractors or United States 

NGOs, so we are dealing with organizations we know. We know 

them. We know their auditing system. 

Second, we try to get our staff out as much as possible. They cannot get into the Gaza strip right now, but they do get out and lay 

eyes on American, U.S. Foreign Service employees as much as possible on the West Bank. 

Third, we use our Foreign Service nationals, most of whom obviously speak Arabic, to get into the Gaza strip and lay eyes on the 

project and report back to us, including photographs and so forth. 

Fourth, we use the American contractors to check on other 

projects so we get yet another layer. We have developed an MIS–

GIS system—we are actually talk about satellite imagery and so 

forth—to check on all of this. 

34

And then, sixth, we have got a very extensive auditing system 

and follow-up to double-check normal auditing procedures. 

Now, is that as good as me going out and looking at it myself? 

No, sir. I would not pretend that it is, but we believe that we have 

very good validity on how those tax dollars are being spent and 

that they are getting to the ultimate end user. 

Mr. BERMAN. Thank you, Mr. Chairman. 

Mr. SMITH OF NEW JERSEY [presiding]. The Committee stands in 

recess. We will be back as soon as we can. 

[Whereupon, a short recess was taken.] 

Mr. SMITH OF NEW JERSEY. The Committee will resume its hearing, and I would like to yield to the distinguished gentleman from 

Iowa, Chairman Leach. 

Mr. LEACH. At any point in time, timing is sometimes as important as substance. A year or so ago, when the new secretary of 

state came for the first time before our Committee, in talking about 

the Middle East, I mentioned some concerns about the issue of 

mortality, and I suggested that we had what appeared to be two 

credible leaders to potentially reach some sort of an accommodation 

between the parties and Mr. Abbas and Prime Minister Sharon. 

If one took a bet on whether both would be alive in 2 or 3 years, 

it would have been a bet not many people would take, and I raise 

this from the perspective of this circumstance. It is new. We no 

longer have Mr. Sharon in power. We now have Hamas in what appears to be the driver’s seat, and so one of the great questions becomes one of timing, and do we have the luxury of responding to 

a lot of ideology we do not like with some turnoffs of our own? 

And I raise this in this sense: There have been calls on this Committee today not to have any discourse with Hamas, not to have 

any diplomatic context, and I want to tell you, I can think of nothing that seems to me to more ill fit the times. It is one thing to 

disagree with everything that Hamas stands for in terms of the apparent desire to eliminate Israel. It is another thing not to talk 

with people we differ with. Simply from a timing sense, it strikes 

me that to refuse to engage is one of the great mistakes of our 

time. Would you care to comment on that circumstance, Ambassador Welch? 

Mr. WELCH. Thank you, Congressman Leach. I agree with you, 

sir. When I took my responsibilities a year ago or so, I would never 

have predicted the sort of sweeping leadership changes we have 

seen not just in this particular place but elsewhere in the Middle 

East. In that year, for example, we have had two elections in 

Egypt, two in the Palestinian territories, three in Iraq, and one in 

Lebanon. These are dramatic times in this particular area. 

The array of political forces out there does include some actors 

with which our discourse is very, very limited, not just nonstate actors like Hamas but also countries like Iran. In the case of Hamas, 

in addition to the policy differences that we have that shape our 

approach, which is one essentially of speaking from a distance 

about what our requirements are as a nation and as part of the 

international community for this organization, there are also significant legal impediments. 

We operate, naturally, and abide by according to American law, 

which since Hamas is designated as a foreign terrorist organization 

35

under American law, were I to have a conversation with any member of Hamas or any official of Hamas, I would be breaching the 

law. I cannot do it, even if I wanted to. The situation, for policy 

reasons, is that we have elected not to. To discuss the alternatives, 

I think, in that sense, becomes a pretty narrow and constricted discussion with respect to Hamas. 

I think when they assume the responsibilities of government, 

and I am assuming they will take over the Palestinian Government, they will feel some need to respond to the international community’s requirements, and they may increase their own communication outwards. In terms of the position of the United States, I 

think we are not isolated in what we are saying are those requirements. We enjoy good international support for the three principles 

that we have laid out and enshrined in the quartet’s statement of 

January 30. I believe that those are increasingly self-evident to 

many, many members of the international community, including 

some Arab states. 

So I think this is more a problem of Hamas’s isolation by virtue 

of their lack of response to these concerns rather than our own, sir. 

Mr. LEACH. Well, that could be, but once they become the government of what, in effect, is a nonstate, they take on certain aspects 

that also relate to American history. Jefferson himself talked about 

we have relations with people with whom we differ. We had relations with Joseph Stalin, one of the great terrorists in the history 

of man. We formed what was probably the greatest alliance in the 

history of the world, the United States-Soviet alliance to defeat fascism. 

If we are going to achieve peace, do not we have to talk to people 

that control the levers of decision-making for that prospect? Do we 

press Hamas into only discourse with Iran, only discourse with parties we do not appreciate, or do we want to move in a new direction? It may take a change in legislation, but as much as one might 

be appalled with the positions of someone, not to discourse with 

them strikes me as a bit awkward for a great nation-state. 

Mr. WELCH. Well, Mr. Leach, I think the first part of your question was, in some respects, the part that we ought to pay more attention to, and that is the condition that if we are to achieve peace, 

if we are going to make that effort, then I think the onus should 

be on the other side, the other party, whoever it is, Hamas or any 

other party, to accept what is commonly understood to be the path 

for peace in this conflict. If they can prove that they are intent 

upon achieving peace by the standards that everybody has seen as 

appropriate for this struggle, then I am sure they will have an audience. Until then, I think the responsibility of a great nation is 

not to demean itself simply for the purpose of the discourse. 

I think, in saying that, too, I can be confident I am not going to 

have any lack of understanding of what their attitudes or positions 

will be. I am sure there will be lots of people beating a path to our 

door to communicate those and lots of people announcing things in 

public, but the thing that we expect them to announce is whether 

they agree with what it is everybody else has agreed to. Under 

those circumstances, then we can evaluate whether it is appropriate to change our position. 

36

Mr. LEACH. Well, I hope that tactic works, and there a lot of efforts to be sympathetic to some of the underlying reasons for it. I 

do not know a lot of incidents in the history of man that refusal 

to have discussions with another side has led to agreements that 

are workable, but if we can come up with something novel in the 

history of man, I would welcome that tremendously. Good luck. 

Mr. WELCH. Just to conclude, I probably should have indicated 

earlier, this approach does have the benefit of some experience. It 

is not unlike the approach that we took with respect to the PLO 

over the years. 

Mr. LEACH. And we had certain discussions with the PLO at 

given points in time. It is also not unlike the position we have 

taken with Fidel Castro, although we have certain discourse with 

his government that we are not having with this one. The Castro 

model, while understandable, is not a model that many people 

would suggest has been successful. Thank you, Mr. Chairman. 

Mr. SMITH OF NEW JERSEY. Thank you. Mr. Engel? 

Mr. ENGEL. Thank you, Mr. Chairman, and, gentlemen, thank 

you for very excellent testimony, and I also want to publicly thank 

the Administration for its strong support and principled support on 

this issue. Condoleezza Rice was at our Committee last week and 

also was very firm in saying that we will not deal with a terrorist 

organization like Hamas. 

So there should be no mistake, I thought it would be helpful if 

I were to quickly read into the record a part of what the Hamas 

Charter says because I think it speaks for itself. It is a wonderful 

document, an amazing document. ‘‘Wonderful’’ is the wrong word. 

It is amazing for its clarity and for its message. 

Throughout the document, Israel is constantly attacked, and 

Jews are attacked and blamed for everything bad that has ever 

happened in the world. It is really just astounding. Jews are responsible for the Free Masons, rotary clubs, lion’s clubs. They are 

to be blamed for World War I, World War II, the League of Nations, and the United Nations. 

So let me just read a couple of paragraphs of the Hamas Charter, 

and I am quoting. It says clearly:

‘‘The prophet, prayer and peace be upon him, said the time will 

not come until Muslims will fight the Jews and kill them, until 

the Jews hide behind rocks and trees, which will cry, Oh, Muslim, there is a Jew hiding behind me. Come on and kill him.’’

It also says, and I quote:

‘‘Peace initiatives, the so-called peaceful solutions, and the 

international conferences to resolve the Palestinian problem 

are all contrary to the beliefs of the Islamic resistance movement, for renouncing any part of Palestine means renouncing 

part of the religion.’’

So I just, you know, think this needs to be said because there is 

no doubt in my mind that Hamas cannot be appeased and should 

not be legitimatized by the international community. The ball is 

clearly in their court. They know what they have to do in order to 

have discussions and negotiations. They need to abide by all previous agreements signed by the Palestinians, they need to recogVerDate Mar 21 2002 10:38 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6601 F:\WORK\FULL\030206\26332.000 HINTREL1 PsN: SHIRL
37

nize the right of Israel to exist as an independent Jewish state, and 

they need to renounce terrorism. It is as clear as that, and if they 

do that, we will be happy to speak with them. 

I want to also, like Mr. Smith before, talk about some of the 

other countries, like Egypt and Saudi Arabia, that can play an important role but really cannot have it both ways. You know, in 

2000–2001, when Yasser Arafat rejected a peace agreement with 

Israel where he could have had 100 percent of Gaza back, 90 percent of the West Bank, a state of his own, billions of dollars of 

international aid, a Palestinian state, he rejected it, and I felt, at 

that time, that countries like Egypt and other countries did not put 

enough pressure on him, did not hold his hand and say, If you take 

this plunge, we will be with you every step of the way. 

I think that these countries that get billions of dollars of aid from 

the United States really need to not be allowed to have it both 

ways. They really need to tell Hamas that this is unacceptable. 

Let me just ask a couple of questions. With a majority in the 

PLC in control of various ministries held by Hamas, how can we 

deal—I guess this would be Mr. Kunder—how can we deal with the 

security forces of a governing authority that is controlled by a terrorist organization? 

Let me also say, I mentioned before that I met with Mr. Abbas 

in Ramallah. How could he serve as any kind of counterweight to 

Hamas, given, frankly, how little he was willing to do when he was 

fully in control? We urged him, get out there and campaign, get out 

there and tell your people that a Hamas government would be a 

disaster, and yet he was unwilling to do that. So how can he serve 

as any kind of counterweight to Hamas? 

Mr. KUNDER. Did you want General Dayton to answer the question about the security forces, sir? We really do not have any contact with the security forces. 

Mr. ENGEL. I am sorry. Well, anyone who would care to answer 

that. 

Mr. DAYTON. I will take that, Congressman, just as a very narrow one. 

Mr. ENGEL. I am sorry. Let me just add, is there any doubt that 

unless Hamas or the Palestinians dismantle the terrorist infrastructure and go after the terrorists and disarm these independent 

militias, that it is impossible to have any kind of peace, and how 

can we expect Hamas to do that when they are part of the problem? 

Mr. DAYTON. Well, very quickly, on the first question you asked, 

which was basically, can we work with the security forces under an 

Hamas government, I would have to tell you the answer is, no, we 

cannot. Simple. That is straightforward. Now, are there other options? I do not think so. I think the answer is very straightforward. 

It goes to the heart, though, of the issue, which is if you do not 

get the security sector fixed, you are not going to fix anything else, 

so that is going to be a problem that we are going to have to deal 

with. 

Mr. SMITH OF NEW JERSEY. Ms. Berkley? 

Mr. ENGEL. Ambassador Welch, I am just wondering if you had 

a comment on that, including Mr. Abbas and the other Arab countries. Let me just say, my problem is that down the line we already 

38

see the Russians talking to Hamas, the Europeans sending humanitarian money. Are we going to be firm, or will we start creating 

legal fictions where we will isolate specific Hamas figures in the 

Palestinian Authority, but we will continue to deal with the PA in 

general under the guise of humanitarian aid? That is my big fear, 

that down the line we sort of finesse it a little bit, and Hamas has 

its cake and can eat it as well. 

Mr. SMITH OF NEW JERSEY. The time of the gentleman has expired, but, Ambassador Welch, if you want to respond. 

Mr. WELCH. Thank you. I will try to be brief. 

Congressman Engel, I hope we have conveyed to you today with 

conviction that we intend to be firm behind the principles that we 

set out. As you know, we built a pretty strong base of international 

support for those, especially using the quartet mechanism, which 

has proved uniquely valuable because it brings in the United Nations and the EU and, yes, Russia. That is America’s position, and 

we intend to hold to it, sir. 

With respect to the positions of other Arab countries—Egypt and 

Saudi Arabia, you mentioned, but there are also others whose 

views are relevant in this regard—I think, so far, we do not detect 

any automatic homogeneity in those positions. For example, Egypt 

has met with Hamas representatives, including recently, but also 

going back some time, in order to forge a period of quiet, whereas 

Saudi Arabia has not yet. Some other Arab states have met with 

them; some have not. 

I think until the Hamas government forms itself and begins to 

make its view more clear on what the international community expects of it, it would be premature to react to what those individual 

Arab countries are saying and doing about this. 

With respect to the position of the President of the Palestinian 

Authority, I think you heard my earlier answer on this sir. Would 

you think this is a man with whom we could work? He has an important role under the basic law of the Palestinian Authority. He 

has important constitutional responsibilities which carry forward, 

and he has subscribed to the agreements that are on record, including the roadmap, which, yes, sir, does call for the dismantlement 

of terrorist organizations. 

I think, as General Dayton mentioned in his prepared remarks, 

Mr. Engel, we all recognize that is going to be an even tougher 

challenge than it was before, when and if there is an Hamas-led 

government in power. I do not know how they will apportion the 

security responsibilities. That remains a subject to be decided, but 

my expectation is that when Hamas is in government, they are 

going to have the security responsibilities. 

I do not know what their position will be on the requirements of 

the roadmap, but our expectation will not change; that is that all 

of these militias and terrorist organizations should be dismantled, 

including Hamas. 

Mr. SMITH OF NEW JERSEY. Ms. Berkley? 

Ms. BERKLEY. Thank you, Mr. Smith, and thank you, gentlemen, 

and, Ambassador Welch, I think you sound like I feel right now, 

so I am sorry for us both. 

I know that you gentlemen are working very hard and have a 

very challenging job, but I can tell you, sometimes I sit up here, 

39

and I think I am living in a parallel universe, and I wonder myself, 

as a Member of the International Relations Committee and the 

Middle East Subcommittee, exactly what our foreign policy is in 

this country when it comes to the Middle East and what is happening there. 

I was a tremendous proponent, long before I came to Congress, 

of the peace process, and it became painfully apparent to me when 

Yasser Arafat walked away from Camp David that this had nothing to do with the Palestinian state. If Yasser Arafat and the Palestinian leadership had wanted a Palestinian state for the Palestinian people, they would have one now. This is about the destruction of the state of Israel, and I have a number of questions regarding our policy and where we go from here and what difference does 

it make. 

Mr. Kunder, when you spoke, you mentioned, in the last 4 years, 

there has been tremendous deterioration on the West Bank. Well, 

for 3 of those 4 years, Yasser Arafat was in control of the Palestinian Authority, and through his hands went millions and millions 

and millions of dollars from the international community, money to 

be used to improve the lives of the Palestinian people. Now it is 

apparent that the money was not used, and we have a limited idea 

of where the money went, although I suspect that if we found 

Yasser Arafat’s widow, we could find out where at least some of the 

money went. And the last year of the 4 years, Abu Mazen was 

President of the Palestinian Authority, and to say that I have been 

less than inspired by his leadership would be a gross understatement. 

As Congressman Engel said, I also met with Abu Mazen, and I 

was in Gaza with him and talked to him about his unique role and 

opportunity to truly bring peace to a very troubled region in this 

world, to bring a lasting peace between the Palestinian people and 

the Jewish state of Israel, and he did little, if anything, to move 

forward. 

So the fact that Hamas is there now is a big surprise to anybody. 

It is certainly not a surprise to me, and I am beginning to get a 

little worried that we all think Fatah was such a bargain, where, 

from my advantage, Fatah did little, if anything, to move the peace 

process forward because, as I said before, in this last year, Abu 

Mazen had a wonderful opportunity to negotiate a serious and lasting peace with the Israeli people. He chose not to. Whether he did 

not want to or did not have the strength or was afraid to, I do not 

know what it is, but I would like to know one question. Do you see 

a big difference not what is in the charter of Hamas but what they 

are going to do that is really any different than Fatah did? That 

is number one. 

Number two, when Conde Rice was standing with the Saudi representative a couple of weeks ago after she left Egypt, and Egypt 

rejected America’s request not to fund Hamas, the Saudis said to 

her that the difference between direct aid and humanitarian aid 

was a difference without a distinction. That summed it up pretty 

well to me. I do not often quote the Saudis, and I am not a fan, 

but I think they hit the nail on the head. 

40

What is the difference between giving humanitarian aid and aid 

directly to the Palestinians if it is not getting to the Palestinian 

people and having the effect of bringing them to the peace table? 

Number three, when do we expect the Palestinian people to have 

an expectation of their government to provide the basic services 

that the Palestinian people need to move forward and improve the 

quality of their lives? According to the Hamas Charter, we know 

that the Jews in Israel are to blame for everything that ever happened in this world, but the reality is it is the Palestinian leadership who has done such a terrible disservice to the Palestinian people, and it would seem to me, if we withdrew our support, and they 

had no other avenues, they might look to where they should be 

looking, and should have been looking all of these years, and that 

is their own leadership to provide the necessities of life so that the 

Palestinian people can move forward. I would love to get your opinion on that. 

But I fear that until we do a little tough love here and make the 

Palestinian people accountable for their own decisions and their 

own future, that we are going to be doing this for the rest of our 

lives, and there will never be peace in that region. So if I could ask 

you to respond to any and all of my stream of consciousness, I 

would appreciate it because, frankly, I do not know where our policy is going. 

Mr. WELCH. Well, I will take a stab at trying to answer some of 

these questions, Ms. Berkley, but I agree with the theme of what 

you are saying. This is an enormously complicated and difficult 

issue. 

There are days when I go to the office and think I am also living 

in a parallel universe, and there are definitely days when we look 

at these things and realize that the challenges are more enormous 

that day than they were the day before. January 26 was one of 

those days. 

Last year, the first year of President Mahmoud Abbas’s presidency, was a year dominated by preparation for and achievement 

of a peaceful cause of disengagement. We have sort of forgotten 

that important contribution that Ariel Sharon gave to securing 

Israel, and it is important to go back and recognize that that was 

accomplished and successfully. 

Ms. BERKLEY. Well, I think that is to the credit of Ariel Sharon, 

not necessarily Abu Mazen. 

Mr. WELCH. Well, I agree it was initiated by the Israeli prime 

minister, and it was thanks to his leadership that it was carried 

through, but it could not have been accomplished peaceably without the cooperation of the Palestinian Authority under President 

Mahmoud Abbas’s leadership. 

I think we all are critical of the lack of performance of the Palestinian Authority in any number of areas, and most of all, their voters, and their voters have gone and rewarded an opposition party 

and kicked out the bums who did not satisfy them before. 

With respect to statements that you may have noted during the 

secretary’s visit to the Middle East with respect to future assistance, I think we just need to take a pause here, Ms. Berkley, until 

we see what sort of Hamas government we are dealing with and 

then what kinds of reactions there are from the international comVerDate Mar 21 2002 10:38 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 F:\WORK\FULL\030206\26332.000 HINTREL1 PsN: SHIRL
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munity. Our discussions with the Saudi and other governments in 

that area gave us a good opportunity to lay out our concerns and 

to hear from them about theirs. One prominent concern they do 

have is not to make the Palestinian people victims of either their 

own poor leadership, previous or present, and to continue to provide them with humanitarian assistance. 

This gets to your third point: Why not withdraw our support? I 

believe, frankly, many Members of this Committee and certainly 

the Administration share an interest in responding to the real humanitarian needs of the Palestinian people. How to do that is a 

valid area of discussion. We are going through that discussion right 

now ourselves and with others, and, of course, we have been talking about it today. Again, we do not have all of the answers, but 

I think it would be an inappropriate answer to say, no, we should 

not give anything at all to the Palestinian people. I would hope 

that this Committee would agree, when we come forward with 

ideas in this area, that they are responsible and worth taking a 

look at. 

Mr. SMITH OF NEW JERSEY. Mr. Delahunt? 

Ms. BERKLEY. Can I just ask one more quick question? 

Mr. SMITH OF NEW JERSEY. Your 5 minutes are over. 

Ms. BERKLEY. 1 more minute. 

Mr. SMITH OF NEW JERSEY. How about for the record? 

Ms. BERKLEY. Can I ask a question, then? 

Mr. SMITH OF NEW JERSEY. Okay. 

Ms. BERKLEY. Thank you. 

Mr. SMITH OF NEW JERSEY. If you could just make it very brief. 

Ms. BERKLEY. All right. I often think what the world would be 

like if there was peace, and a Palestinian state living side by side 

with a Jewish state of Israel. Imagine the economic opportunity for 

the Palestinian people and the suffering that would be alleviated 

if they could partner with the Israelis instead of vowing to destroy 

them and send them into the sea. 

I understand the desire for humanitarian aid. None of us wants 

to be heartless, but, on the other hand, I would hope that the deprivation would ultimately lead to the Palestinians recognizing that 

the path toward restoration, the path toward a viable Palestinian 

state, the path toward decent quality of life for the Palestinian people where they have good schools and good hospitals and good 

health care and good jobs goes through Israel, where you have two 

partners that are dedicated to improving and raising the standards 

of living in that entire region, and together they could do this. 

Alone, the Palestinians will never be able to. We can give them aid 

from now until the cows come home, and until we have a change 

of thought and philosophy, and they are actually forced to make 

peace with the Israelis, I fear we are condemning these people to 

purgatory forever. 

My heart goes out to the Palestinian people. I think we have 

poorly served them. Their leadership has served them, the European Union has served them, and the United Nations has not 

served these people well. 

Mr. SMITH OF NEW JERSEY. Mr. Delahunt? 

Mr. DELAHUNT. If I could just get some very brief, succinct answers. General, there have been reports that Al Qaeda has infilVerDate Mar 21 2002 10:38 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6601 F:\WORK\FULL\030206\26332.000 HINTREL1 PsN: SHIRL
42

trated Gaza and the West Bank, and presuming that that is accurate, can you relate to me your assessment of the relationship between Al Qaeda and Hamas? 

Mr. DAYTON. The simple answer is I have not seen the intelligence that generated that, so I really cannot tell you. It is something that I will certainly take a look at, and if you would like, we 

can get back to you with an answer. 

Mr. DELAHUNT. But you are not aware of it at this point in time. 

I would suspect that if there had been intelligence to that effect, 

given your role, it would have been brought to your attention. 

Mr. DAYTON. That is correct. This issue has been brought up several times by several actors. We have pressed them for the intelligence basis for it and, frankly, have not gotten much of a response. 

Mr. DELAHUNT. Okay. So we do not know. 

Mr. DAYTON. Correct. 

Mr. KUNDER. Very good. My colleague from California, Mr. Sherman, indicated that the United Arab Emirates has been a substantial source of revenue and support for Hamas. Is that accurate, 

Ambassador? 

Mr. WELCH. Mr. Delahunt, to the best of my knowledge, the 

United Arab Emirates Government has no relationship with 

Hamas. There were a number of things that Mr. Sherman raised, 

including in a hearing yesterday on the Dubai Ports World issue, 

which I would like the opportunity to go back and check point by 

point. 

Mr. DELAHUNT. So, Ambassador, you are telling me that you are 

unaware of any relationship whatsoever between the United Arab 

Emirates and Hamas. 

Mr. WELCH. Well, I am not aware of any relationship between 

the United Arab Emirates Government and Hamas. That said, the 

United Arab Emirates has two and a half to three million citizens. 

Mr. DELAHUNT. That is fine. I will accept that. 

Let us presume that the Europeans and that this government 

eliminate all but basic humanitarian assistance to the PA once an 

Hamas government is formed. Where would they be looking in 

terms of revenue sources, and what would you anticipate the response from those sources would be? 

Mr. WELCH. Well, sir, in the past, the Palestinian Government 

has funded itself from basically four different sources: Its own domestic revenues, including those returned to it by Israel when they 

collect taxes——

Mr. DELAHUNT. Okay. That is eliminated because the Israelis are 

not——

Mr. WELCH. That is presently frozen. 

Mr. DELAHUNT. Right. 

Mr. WELCH. There are some modest domestic revenues they collect themselves. 

Mr. DELAHUNT. Okay. 

Mr. WELCH. Second, there is international community support, 

especially from the European Union. 

Mr. DELAHUNT. Let us presume that is eliminated. 

Mr. WELCH. Let us presume that is suspended. 

Then there are Arab League contributions. 

43

Mr. DELAHUNT. Do you anticipate that those contributions would 

continue, and if they would continue, would they be enhanced? 

Mr. WELCH. I cannot make a judgment yet on that. The members 

of the Arab League have had an uneven record at best in delivering 

on previous pledges. 

Mr. DELAHUNT. Well, in your early review, I presume you are in 

the process of making that assessment now. What is your gut telling you? 

Mr. WELCH. We have gone beyond the assessment, Mr. Delahunt. 

We are involved in diplomatic efforts to address those funding 

questions, sir, and my gut tells me that this is going to be a much 

tougher fundraising exercise for those fellows than they have contemplated so far. 

Mr. DELAHUNT. Okay. Let us go beyond the Arab League. 

Mr. WELCH. Finally, they can raise money from their own resources, and I imagine they will tend to be very creative in how 

they do that. The previous Palestinian Authority Governments 

have borrowed a great deal of money. 

Mr. DELAHUNT. From whom? 

Mr. WELCH. From banks, commercial loans. I do not know how 

successful the new government will be in doing that sort of thing. 

Mr. DELAHUNT. We have heard references to both Russia and 

Turkey. What about China? 

Mr. WELCH. Russia has not been a substantial contributor in the 

past. 

Mr. DELAHUNT. Could they be? 

Mr. WELCH. Well, potentially, any country could be, sir. 

Mr. DELAHUNT. What about the Turks? 

Mr. WELCH. I do not think the Russians are likely to do so because they have signed up to the quartet principles. That would 

seem to me to be a contradiction to those. 

Turkey; I have not looked at that one. They are not an important 

contributor in the past. 

Mr. DELAHUNT. China? 

Mr. WELCH. Ditto. They are not an important contributor in the 

past. 

Mr. DELAHUNT. They have energy needs. Obviously, they have 

significant energy requirements. 

Mr. WELCH. Correct, but they are not significant participants in 

the international assistance community overall. 

Mr. DELAHUNT. But they might very well have a national interest to secure a favorable reception within the Arab and access to 

potential revenues. 

Mr. WELCH. It is conceivable, but that would be a stark departure from their past practice, Mr. Delahunt. 

Finally, let me just note that there is a difference between running a service organization and running a government. Running 

the Palestinian Authority Government to make up for the funding 

gap is an over $100 million-a-month enterprise. That is a lot of 

money to go collect. 

Mr. DELAHUNT. Thank you. Thank you, gentlemen. 

Mr. SMITH OF NEW JERSEY. Thank you very much, Mr. Delahunt. 

Let me just ask a couple of questions and then go to Mr. Crowley, and then we will have to conclude the hearing. I would ask 

44

that, without objection, a letter from the Catholic Bishops, Bishop 

Thomas Wensky, the Bishop of Orlando, the Chairman of the Committee on International Policy, be made a part of the record. 

He says, in pertinent part, that the bishops do not believe it 

would be wise or just to withhold aid to the Palestinian people at 

large or to punish them for the possible actions of their political 

leaders and makes, I think, a very persuasive case about the importance of ensuring, especially since poverty and unemployment 

are so high, that NGOs and PVOs be utilized and makes a very 

strong statement along those lines. 

I would ask you, if you could, to respond to a letter that the National Interreligious Leadership Initiative for Peace in the Middle 

East posed in a February 13 letter to President Bush. They had a 

press conference on the 18th of February. They had representatives, clergy, from Christianity, Judaism, and Islam all at the press 

conference. 

Cardinal McCarrick made the point that, and I quote, ‘‘things 

have changed in the Holy Land, but that is all the more reason to 

stay with the roadmap.’’ He goes on to say that they are calling to 

press for an immediate, comprehensive, and lasting cease fire and 

to appoint an on-the-ground special envoy to manage and monitor 

negotiations. I wonder if you might respond to that last point, especially the special envoy to manage and monitor negotiations. Is 

that something that might be appointed by the Bush Administration, such a person? 

Mr. WELCH. I do not foresee us addressing that idea in the near 

future, sir. I think the near future is going to be dominated by 

dealing with the consequences of the Palestinian election and a 

new government under a group that is a terrorist organization, according to American law. Pursuit of negotiations right now would 

not seem to be warranted. 

Mr. SMITH OF NEW JERSEY. Is it something that is under consideration? There needs to be, obviously, intermediate and longer-term 

perspectives taken into account here. 

Mr. WELCH. Well, we would look at that option if we considered 

that there was an immediate and viable possibility. For example, 

last year, the quartet appointed a special envoy for Gaza disengagement, Jim Wolfenson. I think if we came to a judgment, either as the United States or as a member of the quartet or in some 

other way, that this was a viable option, we would look at it. 

Mr. SMITH OF NEW JERSEY. Mr. Crowley? 

Mr. CROWLEY. Thank you, Mr. Chairman. 

Thank you for your testimony today. Given the fact that Hamas 

now has been successful in taking control of the Palestinian Authority through democratic means, I believe the United States has 

been helping, but I want to know what you plan to do in the future 

in terms of promotion of more moderate voices within the Palestinian Authority. What specific plans do we have, or are there any 

plans you can speak about? 

Mr. WELCH. Well, I will provide part of the answer, sir, and ask 

Jim Kunder to help me with the rest. 

Looking forward, this is one of the areas of the aid review that 

we need to pay particular attention to because we have had democracy promotion activities in the Palestinian territories as part of 

45

our past program. Mr. Kunder can give you a sense of what that 

consisted of because, as I said earlier in prepared testimony, this 

is a pretty diverse program. 

As we go through this aid review, a real question comes into our 

minds about how to continue that element of the program going 

forward. I think we all believe that it is important to work with 

a moderate center, and there is a civil society that is quite active 

in the Palestinian territories. We need to figure out how we relate 

to that and if assistance is an appropriate way to do it in the future. We have not decided that, sir. 

Mr. CROWLEY. Ambassador Welch, a congressman testified earlier about the closeness of the election, how the number of seats 

that Hamas won did not reflect the underlying vote because of the 

complexities of the dual-voting system there, and I mention that 

we, in fact, have been doing a number of programs over the years, 

I think, quite successfully. 

To get at exactly the point you are talking about, within the government, we had been, as the peace process was moving along, 

working to reform certain ministries so that, for example, the Ministry of Finance, which had been subject to allegations of corruption 

in the past, now has some accountability systems, accounting systems, budgeting systems so that we have a clearer picture. That 

kind of reform had been taking place. 

Then within the broader society, we have been working with 

business groups, with civil society groups, like lawyers groups and 

women’s groups, to bring them into the political system to try to 

do exactly what you are talking about, to reach out to moderate 

elements, which we consider to comprise a large portion of the population. 

Mr. CROWLEY. Let me ask another question, and that is, just 

shifting gears a bit, in terms of what is legal, assuming the United 

States, in some way or some capacity, wanted to assist the Palestinian Authority and the Palestinian people, given the changes in 

law that have taken place since 9/11, the Patriot Act and other 

laws that have cracked down on money laundering and direct or indirect financing of terrorist organizations, how will that actually 

occur now if that were to take place? Will banks actually conduct 

the necessary business that needs to take place in order to comply 

with the law? 

Mr. WELCH. Well, Mr. Crowley, I do not have a really good answer to that question because it is a really hard question to answer. Our laws are very strict, and there are a number of them 

that apply, and they inhibit us completely from dealing with terrorist organizations or providing any material support to terrorist 

organizations, whether they are in government or out of government. 

When you try and implement that law and our policy in the Palestinian territories, you run up against some difficult questions. It 

is a particularly poignant question for our NGO and PVO community, who are the providers for most of our assistance. The bulk of 

our assistance is not done directly by government employees, but 

we require them to sign certain certifications, making them, to 

some extent, legally liable as well. I think it is something that merVerDate Mar 21 2002 10:38 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6601 F:\WORK\FULL\030206\26332.000 HINTREL1 PsN: SHIRL
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ited examination and careful vetting in each and every activity 

even before this election. 

So what we started several months ago was to look at the integrity of that vetting process on the part of the U.S. Government, and 

Mr. Kunder can explain in a little bit more detail, if you are interested, sir, or we can give you something for the record on this. Particularly when you are not dealing with a government for most of 

your work—you are dealing with people or organizations—it is 

often difficult to discern who the heck they are, and we need to be 

very confident about who it is we work with. 

Mr. CROWLEY. I would be interested in a more possibly detailed—I know time does not permit—a more detailed answer on 

that because I think my observation is, even if the United States 

wants to help, I think there are many laws that may prohibit the 

actual transfer of funds to a known terrorist organization. 

Mr. KUNDER. Yes, sir. We will submit something for the record, 

but I can assure you, we have very careful vetting of each organization, to the maximum extent possible, before we give them any 

money. 

Mr. CROWLEY. Thank you. 

Mr. SMITH OF NEW JERSEY. Thank you, Mr. Crowley. 

Let me just conclude by thanking our extraordinary witnesses for 

the excellent work you are doing. The Committee certainly appreciates that on both sides of the aisle, and I personally want to 

thank you. 

At a time when the problems are so elusive, the problems and 

the solutions are so extraordinarily elusive, you are trying to work 

this issue and work it 24/7, and I want you to know how much we 

appreciate that. There will be a number of questions that Members 

who could not return would like to pose, so if you could get back 

to us as quickly as possible, and, without objection, they will be 

made a part of the record as well. The hearing is adjourned, and 

thank you. 

[Whereupon, at 1:32 p.m., the Committee was adjourned.] 

(47)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

RESPONSES FROM THE HONORABLE JAMES R. KUNDER, ASSISTANT ADMINISTRATOR, 

BUREAU FOR ASIA AND THE NEAR EAST, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, TO QUESTIONS SUBMITTED FOR THE RECORD BY THE HONORABLE HENRY

J. HYDE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS, AND

CHAIRMAN, COMMITTEE ON INTERNATIONAL RELATIONS

Question: 

USAID strategy aims to advance President Bush’s vision of a sovereign, independent, viable, democratic and territorially contiguous Palestinian state, living side 

by side in peace and security with Israel. Has this strategy changed? Will USAID 

be able to support this task in the absence of continued support to secular and moderate Palestinian Nonprofit organizations? 

Response: 

The United States remains committed to the President’s vision of a two-state solution to the Israeli-Palestinian conflict in accordance with the Roadmap. The formation of a new Palestinian government dominated by Hamas, a foreign terrorist organization, raises serious political challenges for the U.S. Until the Hamas-led government has accepted essential preconditions (disavowal of terror and violence, recognition of Israel, and acceptance of previous agreements), the USAID program will not 

provide assistance to this government and will be limited to humanitarian assistance and support for moderates. The United States is committed to helping those 

most in need and to providing a space for moderate views and ideas, and will do 

so through international organizations and U.S. and local non-governmental organizations. 

48

QUESTIONS SUBMITTED FOR THE RECORD BY THE HONORABLE HENRY J. HYDE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS, AND CHAIRMAN, COMMITTEE ON INTERNATIONAL RELATIONS, TO LIEUTENANT GENERAL KEITH W. DAYTON, UNITED STATES SECURITY COORDINATOR, U.S. DEPARTMENT OF STATE. NO

RESPONSE RECEIVED PRIOR TO PRINTING.


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QUESTIONS SUBMITTED FOR THE RECORD BY THE HONORABLE HENRY J. HYDE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS, AND CHAIRMAN, COMMITTEE ON INTERNATIONAL RELATIONS, TO THE HONORABLE C. DAVID WELCH, ASSISTANT SECRETARY, BUREAU OF NEAR EASTERN AFFAIRS, U.S. DEPARTMENT OF

STATE. NO RESPONSE RECEIVED PRIOR TO PRINTING.


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