Ladies and gentlemen,

As Chair of the Ad Hoc Liaison Committee I would like to welcome you all to this informal meeting of AHLC donors and partners in Oslo.

Much water has passed under the bridge since the last informal meeting of the AHLC in Stockholm last April. The recent deterioration of the situation underscores the importance of a comprehensive approach, characterised by progress not only on the security front, but also in the political, and in the socio-economic fields.

There is full agreement in the international community that our common goal must be a viable Palestinian State based on the Rule of Law, democratic institutions and respect for human rights. Our guiding principle, as a donor community, remains the vision of two states, Israel and Palestine, living within secure borders in a stable and economically prosperous region.

But the sad reality is that conditions on the ground have perhaps never been worse. In particular, I am gravely concerned by the humanitarian crisis in the West Bank, and by the growing threat of regional instability. We deeply condemned the terrorist attacks that have killed Israeli citizens. But however outrageous these have been, they do not give Israel unrestricted right of response. The recent military reoccupation of Palestinian areas, bringing so much death and destruction upon the civilian population, will not give Israel peace and security. Security in the region is indivisible; it simply cannot be achieved for one side at the expense of the other.

Today, the situation is characterised by the following features:

• The basic infrastructure and civilian institutions of the Palestinian Authority have been severely damaged
• Since October 2000, the living conditions of the Palestinian population have considerably deteriorated
• Dialogue between the parties has come to a standstill. Terror and violence is met with more violence, despite the attempts by many in the international community to foster dialogue and cooperation. Norway would like to commend the efforts of Secretary Powell, Assistant Secretary Burns and their colleagues for their ongoing efforts to break the deadlock
• Finally and most important, the level of trust between the Palestinian and Israeli people, and between their leaders, has plummeted in the last 18 months, and particularly in the last month. Israelis live in fear of suicide bombers, while Palestinians face profound and deepening personal and economic insecurity, and even total destitution as a result of military activities

The massive destruction of civilian and personal property is unacceptable. Israel has a clear obligation under international law to protect civilians. It is now necessary to provide urgent assistance to the wounded, the homeless and the hungry. Israel must act in accordance with basic principles of international humanitarian law and must allow unhindered access for all relief organisations and emergency supplies.

Humanitarian assistance can reduce the suffering, but the fundamental problem remains political: how to build a democratic and viable Palestinian state and provide real security for Israel and Palestinians alike.

The international community has for its part has provided road maps on how to reach a cease-fire and secure a just and lasting peace. This includes UN Security Council resolutions 242, 338, 1397 and 1402; the principle of land for peace, Saudi Crown Prince Abdullah’s initiative, endorsed by the Arab League, the work of the Quartet and the efforts of the US administration:

• The PA must undertake the maximum possible efforts to stop terror against Israeli civilians
• The PA must undertake the steps necessary to dismantle terrorist infrastructure. There can be no more room for half-hearted measures from the PA when it comes to fighting terrorism
• Israel must immediately halt all military operations and withdraw from all reoccupied areas of the West Bank and Gaza. Withdrawal must also include the headquarters of President Arafat
• Israel must stop the destruction of Palestinian Authority institutions and infrastructure. President Arafat and the Palestinian Authority’s capacity to fight terrorism must be restored
• Israel must comply with international humanitarian law and allow full access to humanitarian organisations and deliveries. Israel must undertake all possible efforts to ensure the protection of civilians
• Finally, all incitements to violence on both sides must stop

Many of the issues we discussed a year ago in Stockholm remain on the table today - the downturn in economic conditions facing Palestinians as a result of closures; the budgetary shortfall facing the Palestinian Authority; the exceptional measures being taken by donors to fill the budgetary gap; and steps by donors to support urgent social and economic programmes such as in the job creation field.

Let me take this opportunity to particularly acknowledge the support to the PA provided by the Arab countries through the IDB and the Arab League, as well as by the European Union. Without this budgetary support, the PA would have been in an even more critical situation. I am pleased to note that the Arab League and the European Union are willing to continue to provide budgetary support also in 2002. We have for our part also provided USD 10 millions in budgetary support this year. We intend to make available another USD 11 millions as part of our total contribution of USD 60 millions to the Palestinians this year, bilaterally as well as multilaterally.

Since last year, the economic and fiscal situation in the Palestinian Area has deteriorated further. The events of the last few weeks will have resulted in a dramatic acceleration of a number of negative trends. Needs have gone up, and the means to address them have gone down.

On top of all this, the Palestinian people are faced with a crisis which demands an urgent and coherent response by the international community. This crisis requires both actions to respond to immediate humanitarian needs, and to respond to immediate repair and recovery needs, notably to restore vital infrastructure such as power and water and to enable the resumption of social services.

The objective of today’s meeting is to review the immediate crisis facing the Palestinian people and to address how we can help them respond to it, and to do so in the context of our commitment to building the infrastructure and institutions of a viable Palestinian state.

We must find a way of exiting the vicious cycle whereby closures and restrictions are driving economic depression, unemployment and poverty which in turn is creating conditions conducive to violence, which in turn threatens Israel’s security. We must try to create a virtuous cycle whereby the easing of closures and restrictions creates economic opportunities for Palestinians, increases their stake in society and marginalizes those who advocate violence.

Norway remains fully committed to the road-map for a peaceful solution developed by the international community. We look forward to the early establishment of a viable and democratic Palestinian State that lives side by side in peace and security with the State of Israel. The AHLC has been and should remain an important mechanism to co-ordinate the international community’s endeavour to support such a process.

Thank you!