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Palestinian Control Widens in West Bank : Mideast: Israel relinquishes schools, health care and social services. Who will pay for them is still a problem.

TIMES STAFF WRITER

Israel formally transferred control of schools, health care and social services in the occupied West Bank to the new Palestinian Authority on Monday, but neither Israelis nor Palestinians were sure how the 3-month-old administration will pay for them.

Although a significant step toward ending Israel’s 27-year occupation of the West Bank, the transfer of power highlighted the Palestinians’ dependence on international economic assistance if plans for increasing Palestinian self-government and the overall peace agreement itself are to succeed.

To get the money needed, Israel and the Palestine Liberation Organization said they will jointly approach Western donors at a meeting scheduled for Sept. 8-10 in Paris to seek $30 million to cover an expected deficit in a budget of $54.5 million for the next six months.

The PLO also will be seeking further allocations to administer the Gaza Strip from the $4.6 billion it has been promised in international assistance.

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The donors meeting is now shaping up as crucial for the PLO and for Fatah, its major faction. Popular support for Fatah, the political base of PLO Chairman Yasser Arafat, has declined in the past three months because of the Palestinian Authority’s slow start after it took over the Gaza Strip and West Bank town of Jericho from Israeli forces.

“People are growing impatient, we need to deliver and money is the key--it determines our ability to meet the people’s expectations,” Nabil Shaath, the Palestinian planning minister, said after signing the accord. “This agreement is an important step toward full autonomy, but it must be underwritten through international assistance.”

But Palestinian authorities on Monday postponed for the third time a meeting that could free $400 million or more in development aid because Arafat is too busy with other duties to attend the session, planned for today in Cairo.

The Palestine Economic Council for Reconstruction and Development said the meeting was scheduled in order to hire a firm to oversee the multimillion-dollar development of the West Bank and Gaza Strip, meeting World Bank requirements for project supervision and thus freeing $400 million to $500 million in aid.

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The meeting will now probably be conducted after the Paris conference of Western donor countries. Arafat’s presence is not necessary, but he had said he wanted to participate in the discussion. The previous meetings were canceled, first, because a decision had not been made on which firm to hire, then because there was not a quorum of council members.

Under the agreement signed with the PLO on Monday, Israel is transferring control over education, health care, welfare services, taxation and tourism throughout the West Bank to the Palestinian Authority as a step toward the extension of full autonomy there. Israel captured the West Bank and Gaza during the 1967 Mideast War.

Israeli Foreign Minister Shimon Peres described the move as a historic event, fulfilling terms of the peace agreement signed a year ago.

“For the first time in history, Palestinians will be able to educate their own children in their own language and in their own tradition--something that has never happened under the British or the Turks or the Jordanians (or) anybody else,” Peres said.

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Palestinians assumed immediate control of the school system--Monday was the first day of class--and they will assume jurisdiction in the other areas once Western assistance is assured. The Palestinian Authority took control of the Gaza Strip and of Jericho in May.

These five areas make up about 60% of the West Bank budget, but 33 other departments will remain part of the Israeli military government until agreements are reached later this year for their transfer.

“The key question is funds,” an Israeli negotiator said. “The Palestinians have the authority to collect the taxes necessary to finance education, medical services and so on, but they do not yet have a full tax system and the personnel to administer it. They will need at least six months before their tax collections are sufficient. Thus, the need for aid.”

The signing Monday was delayed for more than two hours as Shaath protested Israel’s rejection of a Palestinian request to allow a Pakistani diplomat to enter the Gaza Strip on Sunday to prepare for a visit there by Prime Minister Benazir Bhutto. The diplomat was kept waiting for nine hours at the Egyptian border, still controlled by Israeli forces, before being turned away.

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Israeli Prime Minister Yitzhak Rabin later admonished Bhutto to “learn some manners,” saying that Pakistan had refused to coordinate her visit with Israel. Bhutto then canceled the visit, planned for next Sunday.

Predominantly Muslim Pakistan does not recognize the Jewish state, but some Israeli foreign-policy analysts thought Bhutto’s visit could bring the Islamic world a step closer to approving the agreement with the PLO and accepting Israel’s existence.

Under the autonomy accord, Israel remains in charge of foreign relations and border crossings into the autonomy zones. The agreement also stipulates that guests from countries without diplomatic relations with Israel “shall be required to obtain a special visitor’s permit to be issued by the Palestinian Authority and cleared by Israel.”

Rabin showed his anger during a news conference, saying, “You do not declare in the media, ‘I’m going to come to Gaza, and I’m not willing to see any Israeli.’ We have no problem that the lady from Pakistan or her representative will visit, but they have to apply in an orderly fashion,” Rabin said. “I suggest the lady from Pakistan learn some manners.”

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