Israel Looks Abroad To Fund Peace Pact

THE Jewish holidays have come, and Israeli leaders can take a moment's pause from the hurried events that have changed forever the relationship between Jews and Arabs in the Middle East.

But the pause will be brief, and the work ahead long. Upon his return here after the signing of a peace accord between Israel and the Palestine Liberation Organization (PLO) in Washington, Prime Minister Yitzhak Rabin told the Israeli public Wednesday that the fruits of the pact will take time to ripen and will require massive funding from abroad.

``I am convinced that after what happened in Washington, there will be the beginnings of developments,'' Mr. Rabin said. But ``things cannot be achieved in one fell swoop.''

Having made unprecedented concessions, including recognizing the PLO, Israel now expects Washington to buttress the agreement on Palestinian self-rule by raising more than $1 billion from Europe, Japan, and the Gulf states to finance development projects for the occupied Gaza Strip and West Bank, officials here say.

``Once the Palestinians in the refugee camps see there is something in it for them, it will pull the rug out from fundamentalists and opponents of the peace,'' says government spokesman Uri Fromi. ``We need to move from talk to action, and that means money.''

The pact, which was accompanied by separate letters of recognition, calls for self-rule to be applied rapidly in the impoverished Gaza Strip and West Bank city of Jericho, and to be extended later to the rest of the West Bank.

The World Bank estimated this week that $5.5 billion would be needed over 10 years to improve basic services in the occupied territories.

The PLO estimates that 50,000 new apartments will be needed in the territories within the next two years alone.

``If all of this remains a political episode without an economic component it will fail,'' Foreign Minister Shimon Peres said in an interview published Wednesday in the Yediot Ahronot daily. ``Everyone speaks of how to get the Army out of the Jebalya refugee camp [in Gaza]. The real issue is how to remove the poverty of Jebalya from the face of the earth.''

After the signing on Monday, the European Community approved $24 million in additional funds to the territories, raising the EC total this year to $106 million. The EC has also pledged $590 million in aid from 1994 to 1998. Japan has offered $23 million between now and March. Norway said the Scandinavian countries will provide $125 million in aid.

Washington has not disclosed how much it will contribute. But Israel also expects the United States to prod the Gulf states to drop their longstanding economic boycott of Israel. Unofficial Israeli estimates put the cost of the boycott at more than $500 million annually.

``Israel wants the US and the West to encourage other Arab and Muslim countries to join the peace train,'' says Rafi Gamzou, a Foreign Ministry spokesman. ``The idea is to show that the Middle East is changing and that there are concrete and tangible fruits of the process.''

Rabin stopped off in Morocco to meet with King Hassan II on Tuesday. Foreign Ministry officials say that Tunisia, Malaysia, and Zimbabwe also have shown interest in unprecedented open relations with Israel.

The need for swift support for the plan has been underscored by almost daily violence in the territories.

Upon arriving home, Rabin learned that four soldiers were wounded in the West Bank town of Hebron. The attack was carried out by Palestinian gunmen, one of whom was killed. Police Minister Mosha Shachal blamed it on Muslim fundamentalist opponents of the PLO-Israel agreement on self-rule arrangements.

``The people of Hamas and the Islamic Jihad have set a goal of trying to terrorize the process when there is progress and peace,'' Mr. Shachal told reporters.