World Bank head urges reforms

JERUSALEM -- The president of the World Bank pushed Tuesday for Palestinian economic reforms and the lifting of Israeli travel restrictions in the West Bank in exchange for an additional $500 million in desperately needed aid to the Palestinians.

The visit by James Wolfensohn, his first since the outbreak of Israeli-Palestinian violence in 2000, came as British Prime Minister Tony Blair arrived in Jerusalem for talks Wednesday with Israeli and Palestinian officials.

Blair was the most senior in a stream of international officials traveling here in recent weeks to bolster new peace efforts following the death of Yasser Arafat last month. The diplomats also hoped to build on Israeli Prime Minister Ariel Sharon's plans to pull out of the Gaza Strip next year.

Britain is proposing a Mideast conference to promote peace prospects. However, no date has been set, and Israel has said it will not attend.

Palestinians want the conference to deal with the toughest issues outstanding with Israel, issues that have strangled previous peace efforts: Palestinian refugees, Jewish settlements, the border and Jerusalem.

Israel believes the conference should deal with Palestinian administrative reforms that would allow for transparency and for clear command over security forces to enable a crackdown on militant groups responsible for attacks against Israel.

The World Bank has said the withdrawal from Gaza must be accompanied by Israeli moves to dismantle roadblocks and lift travel restrictions in the West Bank and Palestinian steps to reform their bureaucracy and end violence. Only then would there be any hope of resuscitating the Palestinian economy, which has been smothered by four years of violence.

The bank wants international donors, led by the United States and Europe, to add $500 million to the $930 million they already provide in annual aid to the Palestinians, but only if both sides make the needed changes.

Hours later, Gaza was hit by violence as Israeli tanks and bulldozers moved into a refugee camp in the southern part of the region early Wednesday as a response to continued mortar and rocket fire by Palestinian militants, the military and residents said.

The military said that during the operation, set to last about two days, some uninhabited structures used as cover by Palestinian gunmen would be torn down.

Residents of the Khan Younis camp said there were exchanges of fire between Israeli forces and Palestinian gunmen. There were no reports of casualties.

The military said more than 15 mortars and rockets have been fired from the camp at nearby Israeli settlements in the past few days. One hit a synagogue and another exploded next to a kindergarten. Both caused considerable damage but no casualties.

In his talks with Wolfensohn, Sharon said it would be "hard to open crossings and roadblocks when the Palestinians immediately exploit it for terror attacks," according to a statement from Sharon's office.

At a news conference after his meetings, Wolfensohn said further aid depended on the changes he outlined.

"If the current conditions prevail, I don't think you'll get much money," he said, adding that the two sides "do not want to let this moment pass without giving it the maximum effort."

Blair will meet with Israeli and Palestinian leaders Wednesday. He is the highest level official to visit since Arafat's death Nov. 11, reflecting international optimism that peace talks can be restarted with a new Palestinian leadership.

Italian Foreign Minister Gianfranco Fini also visited the region Tuesday and said Italian paramilitary police would begin training Palestinian security forces in coming weeks as part of the European Union's effort to support the Palestinian leadership ahead of the Jan. 9 election for Arafat's successor.

Election front-runner Mahmoud Abbas marked the end of the 40-day Muslim mourning period for Arafat by repeating his commitment to a peace deal that would create a Palestinian state with Jerusalem as a capital.

Speaking in Ramallah at the compound where Arafat was confined for nearly three years before his death in Paris, Abbas said he would follow the Palestinian leader's legacy.

"We will continue the struggle to make your dream and our dream come true and to have a Palestinian child raise the Palestinian flag on the walls of Jerusalem, the capital of our independent Palestinian state," he said.

Abbas also promised government reform, saying "nobody will be above the law."

Israeli Foreign Minister Silvan Shalom said in an interview published Tuesday in The Jerusalem Post daily newspaper that he was "discouraged" by Abbas' refusal to distance himself from Arafat, whom Israel accused of encouraging terror. It was the strongest Israeli criticism of Abbas, a pragmatist seen as Israel's preferred candidate, since Arafat's death.

Abbas, who fought bitterly with Arafat, especially over reform efforts, has been careful not to criticize the popular leader's legacy during the election campaign.