Israel Holds Upper Hand in a Battle of Boycotts

Bishara Daoud has long run a successful travel agency and, hoping to reap a dividend from the 1993 Israeli-Palestinian accords, he recently invested in two new hotels here.

The travel closure imposed last month by Israel after two suicide bombings on July 31 has not only barred Palestinian workers from entering Israel, but also caused tourism here to take a nosedive: Conflict-leery visitors stay home, while others have been turned away or held up at checkpoints. Bethlehem's mayor says that as a result of the closure, the tourism-dependent city lost $12 million.

Mr. Daoud is furious about the larger state of the peace process and angry on a more personal level because his new hotels are empty.

"The Israeli government has declared war. It's an economic war," says Daoud, a member of the Palestinian legislative council, from a seat inside a khaki protest tent set up outside the Church of the Nativity.

Last week, Israel lifted what it calls an "internal closure" on Bethlehem - and Palestinians call a "siege" - which bars residents from leaving the city even to visit other Palestinian towns inside the West Bank. Israeli officials say the blockade was necessary because they suspected that the two bombers came from or received help in Bethlehem. But Palestinians insist that Bethlehem was targeted specifically to hurt them in the pocketbook.

A means of confrontation

What isn't debatable is that Israeli and Palestinian leaders have begun using money as a means to confront each other as never before. In contrast to the economic interdependence to which former Prime Minister Shimon Peres aspired - a "new Middle East" in which prosperity would feed peace - Israelis and Palestinians are trying to wage a kind of economic warfare on each other. Their interwoven economies are coming to be used more as weapons than as a way to peace.

In contrast to his predecessors, Prime Minister Benjamin Netanyahu does not claim that the measures enacted after the bombing are solely for security reasons. Foremost among these was the withholding of some $40 million in tax revenues due to Palestinian Authority (PA), one-third of which has just been released. Israeli officials say that there is a difference between the withheld money and the closure, which was eased slightly Sept. 2 as about one-eighth of the some 50,000 workers were allowed to return to jobs in Israel.

"The closure is not a sanction," says David Bar-Illan, a top aide to Mr. Netanyahu. "It is not a punishment like withholding funds, which is a sanction openly and clearly [and] ... is something we're doing because we felt there was not enough security cooperation."

Palestinians have responded with sanctions of their own, announcing a boycott on the purchase of Israeli goods in the Palestinian-controlled areas. The list of items that the Palestinians merchants are not to buy includes many consumer goods and foodstuffs that dominate grocery store shelves in the West Bank and Gaza. Already, some trucks trying to bring canned goods and soft drinks into Gaza have been turned away, though Israeli products are still seen in most Palestinian shops.

1 | 2

Next