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Palestinian Territories

Last Reviewed: 19 October 2007

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TRADE AND INVESTMENT WITH THE UK

UK trade with the Palestinians is limited, but BG (formerly British Gas) has discovered substantial gas reserves off Gaza. This gas is by far the most valuable Palestinian natural resource, and could become a very important element of the Palestinian economy.

UK Trade & Investment country profile: West Bank and Gaza

UK Development Assistance

The UK Department for International Development's Palestinian programme is a high profile assistance programme dealing with the complex issues surrounding the conflict in Israel and the Occupied Palestinian Territories. With a team of people based in Jerusalem and London, DFID manage an annual programme of £30 million in assistance to the Palestinian people.

Political uncertainty, economic decline and worsening insecurity have characterised the last year and impacted greatly on efforts to reduce poverty in the Occupied Palestinian Territories. In January 2006 the 'Quartet' (EU, Russia, US and UN) set out three principles with which the Hamas-led Palestinian Authority (PA) had to comply in order for support to continue. These were:

  • renunciation of violence;
  • recognition of Israel; and
  • acceptance of previous peace agreements.

The Hamas-led government failed to adopt these principles and as a result, the UK and many other donors suspended financial and technical assistance through the PA. However, the UK and other donors are committed to continue supporting the Palestinian people. One of our greatest achievements has been the lead role we played in the design and implementation of the Temporary International Mechanism (TIM), a funding mechanism to provide direct assistance to the Palestinian people following the suspension of donor budget support to the PA.

In addition to the annual £30 million budget in 2006/07, DFID also provided £40 million through EU contributions. Total EU aid to the Palestinians for 2006, at around €680 million, was higher in 2006 than in 2005.

Since 2004 our assistance programme in the Occupied Palestinian Territories has been built around supporting the Palestinian Authority (PA) and the United Nations Relief and Works Agency (UNRWA), to help end conflict and create a viable and prosperous Palestinian state. Our judgement is that, for now, the overall direction outlined in the 2004 DFID Country Assistance Plan (CAP) for Palestinians remains valid. The Palestinian Programme's three main objectives remain:

  • More effective, accountable and inclusive PA institutions;
  • Humanitarian and development assistance delivered more effectively; and
  • Enhanced prospects for peace.

We have successfully adapted our programme with these objectives in mind to continue targeted and valuable support.

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