CONTRIBUTION OF UNRWA TO KEEPING PALESTINIAN CULTURAL IDENTITY ALIVE, AMONG ISSUES DISCUSSED IN FOURTH COMMITTEE DEBATE

9 November 1998

Press Release
GA/SPD/147

CONTRIBUTION OF UNRWA TO KEEPING PALESTINIAN CULTURAL IDENTITY ALIVE, AMONG ISSUES DISCUSSED IN FOURTH COMMITTEE DEBATE

19981109 Agency's Commissioner-General Also Calls Attention to UNRWA's Declining Income and Increasing Needs

Among the achievements of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) was the Agency's contribution to keeping the Palestinian cultural identity alive, the Fourth Committee (Special Political and Decolonization) was told this morning as it began considering the work of UNRWA. As a result, Palestine refugees were the most highly educated group in the region.

Peter Hansen, the Commissioner-General of UNRWA, also said, however, that the UNRWA was in the fifth year of a downward spiral of declining income and increasing needs. Austerity measures originally introduced in 1993 on a temporary basis had had to be maintained. The Agency's deficit for the current year was expected to be some $62 million. In the immediate future, UNRWA's financial deficit remained its most pressing problem.

He noted that in Jordan, where 1.4 million Palestine refugees lived, the host Government spent more than $300 million annually on refugees, an amount that was almost equivalent to UNRWA's cash budget for all five fields. In comparative terms, the refugees in Jordan were the best off in any field. The 365,000 Palestine refugees registered in Lebanon continued to suffer from extremely poor living and housing conditions, unemployment rates of 40 per cent and restrictions on mobility and economic activity. Syria provided the 365,000 Palestine refugees living there with many of the benefits available to its own citizens.

The Observer for Palestine, said it was a depressing and unfortunate reality that this year marked a half-century of the plight of the Palestine refugees, who awaited the just resolution of their plight. The right of the Palestine refugees to return to their homes and properties and to be compensated if they chose not to return was an inalienable right which had not diminished with the passage of time.

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The grave deterioration of the situation on the ground -- a result of the protracted deadlock in the peace process and the policies and practices of the occupying Power -- served as a glaring reminder of the continuing and urgent needs of the refugees. The deterioration had resulted in a worsening in the daily life of the Palestinian people, with despair and frustration most prevalent among the Palestine refugee population in the Occupied Palestine Territory, including Jerusalem. The refugees continued to face severe socio-economic hardships, including very high unemployment and a decline in household income. Moreover, the operations of the Agency in the Occupied Palestinian Territory continued to be obstructed by measures imposed by the Israeli authorities, such as recent closures, which had restricted the movement of the UNRWA staff and vehicles.

The Observer for the Holy See recognized the substantial and grave pressures the negotiators on both sides of the Wye River Memorandum of 23 October had been subjected to, and hoped that the seeds of the solution would not be crushed by extremism or terrorism. He stressed that the city of Jerusalem, the patrimony of the three monotheistic religions and claimed by two peoples, must not be compromised by preemptive actions which were not a part of the agreed upon dialogue.

The representative of Syria said Israel's blatant challenge to the United Nations and relevant international treaties had caused the general problems in the region. The refugee issue was the crux of the Middle East problem. It was important not to disappoint the millions of refugees and aggravate or prolong their suffering. However, it had become clear that the current Israeli Government had continued to hamper the Middle East peace process, and had reneged on its obligations. Such behaviour ran counter to current efforts and threatened more waves of destruction and violence -- especially the practice of supporting more Jewish settlements among the Palestinian people and in the Palestinian lands.

Statements were also made this morning by the Rapporteur of the Working Group on the Financing of UNRWA, as well as by the representatives of Jordan, Bangladesh, Egypt, Austria (on behalf of the European Union and associated states), Ghana, Malaysia and Norway.

The Fourth Committee is scheduled to meet again at 3 p.m. on Wednesday, 11 November, to continue its consideration on the work of UNRWA.

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Committee Work Programme

The Fourth Committee (Special Political and Decolonization) met this morning to begin its consideration of the activities of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). The Committee had before it the report of the Agency's Commissioner-General covering the period 1 July 1997 to 30 June 1998.

Other documents before the Committee address the following matters: persons displaced as a result of the June 1967 and subsequent hostilities; offers by Member States of grants and scholarships for higher education for Palestine refugees; a note by the Secretary-General forwarding the report of the United Nations Conciliation Commission for Palestine; and a University of Jerusalem "Al-Quds" for Palestine refugees.

The report of the Commissioner-General of UNRWA (document A/53/13) refers to general developments in the Agency's main programmes in education, health and relief and social services; financial matters, budget, income, expenditure and extrabudgetary activities; the Agency's current financial situation; legal matters; information on UNRWA programmes and operations in Jordan, Lebanon, Syria, the West Bank and the Gaza Strip. Two annexes also provide statistical and financial information, and refer to pertinent records of the General Assembly and other United Nations bodies.

According to the report, the Agency continued to emphasize basic services for Palestine refugees and contributing to improving socio-economic conditions in refugee communities. Living standards in refugee communities remained poor throughout the area of operations, and were characterized in some fields by high unemployment, falling household income, overburdened infrastructure, and restrictions on employment and mobility. In view of unabated financial difficulties, the Agency was forced to introduce further austerity and cost-reduction measures that affected the quality and level of services.

The UNRWA's ability to deliver services to the Palestine refugees was negatively affected by continuing financial shortfalls, the report says. Despite the steps taken in recent years to reconcile expenditure with income, at mid-1997 the Agency still faced a budget deficit of $70 million for the year, representing the funding shortfall against the $312 million General Assembly-approved cash budget. More importantly, the gap between estimated income and minimum expenditure on basic needs stood at $20 million. The seriousness of the situation was such that had no further action been taken, the Agency would have run out of funds completely in the last quarter of 1997 and been forced to suspend operations until fresh contributions were received. To avert that outcome, there was no alternative but to introduce yet another round of austerity and cost-reduction measures. The announcement of those measures elicited swift and strong opposition from the Palestine refugee community and host authorities, including protests held at UNRWA

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offices throughout the area of operations and a temporary boycott of Agency schools in the Gaza Strip.

However, the report says tangible progress was achieved in combating the ongoing deficit problem. Through its regular programme, UNRWA continued to provide education, health care, relief assistance and social services to the 3.5 million Palestine refugees registered with the Agency in Jordan, Lebanon, Syria, and the West Bank and Gaza Strip. Agency services included elementary and preparatory schooling, vocational and technical training, and comprehensive primary health care, including family health.

While not denying that any reduction in services would obviously be a negative development, UNRWA sought to clarify that the measures announced were necessitated by insufficient funds, the report says. With $21 million in additional funding from generous donors, the Agency was able to revoke the measures which had provoked the strongest opposition, namely those relating to hospitalization and school charges, after which the controversy surrounding the matter subsided.

According to the report, there was a growing concern within the region in general and among the refugee community in particular that UNRWA might be phased out before a solution to the Palestine refugee issue was achieved. That concern had begun to manifest itself following the signing of the Israeli-Palestinian Declaration of Principles on Interim Self-Government Arrangements in September 1993, which had foreseen the eventual resolution of the long-standing refugee issue and an end to the Agency's mission. Accusations were voiced in the local media and other forums, particularly in Lebanon, that UNRWA was in the process of being phased out as a prelude to liquidation of the refugee issue, and that the Agency did not have the refugees' best interests at heart.

The report says that UNRWA's humanitarian work was carried out against the backdrop of the continuing impasse in the various tracks of the peace process, despite intensive diplomatic initiatives focused on the Israeli-Palestinian track. By the end of June 1998, further redeployments in the West Bank were still awaited and there had been little progress on other interim issues called for in the agreements between the parties, which would have implications for the situation on the ground in the occupied territory. Moreover, the permanent status negotiations, which were to include the issue of refugees, had not yet commenced in substance in accordance with the agreed timetable. The security situation remained tense, with sporadic clashes and protests in the West Bank and Gaza Strip, and occasional acts of violence leading to fatalities.

Socio-economic conditions continued to deteriorate in the Gaza Strip, the smallest and most densely populated of UNRWA's five fields of operation, according to the report. Poor economic conditions, including reduced purchasing power and high unemployment, were exacerbated by the continued

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closure of the Gaza Strip, which had a particularly negative effect owing to heavy reliance on the employment of workers in Israel and on import and export of raw materials and finished goods.

As the interim period set out in the Declaration of Principles drew to a close, the prospect of an agreed solution to the refugee issue appeared remote and the future course of the Middle East peace process uncertain, the report says. The Palestine refugees, who marked five decades of exile in 1998, continued to face declining standards of living and an increasingly tense regional environment, and still relied on UNRWA to meet fundamental needs, education for children and young people, basic health care, support for the disadvantaged and opportunities for self-betterment. Moreover, UNRWA continued to cooperate with Jordan, Lebanon and Syria and the Palestinian Authority in providing services to Palestine refugees throughout the area of operations.

Furthermore, mid-1998 marked the second anniversary of the completion of the relocation of UNRWA headquarters from Vienna to Gaza in July 1996, the report says. While the return of Agency headquarters to the area of operations conferred many advantages, the drawbacks faced at the principal headquarters' location at Gaza continued to pose problems during the period under review. In many instances, the Agency remained unable to identify qualified local staff to fill vacancies at the salaries it was able to offer, while conditions of service in Gaza made it more difficult to attract and retain international staff. The lack of proximity to diplomatic missions, the problems arising from local infrastructure and the restrictions on movement arising from Israeli security-related constraints were not conducive to the effective functioning of a headquarters operation. While the Agency continued to strive to overcome those challenges, it was becoming increasingly clear that certain difficulties were inherent and would remain for the foreseeable future.

On the issue of education, the report says that under long-standing exchange agreements with host authorities to provide schooling for pupils in remote areas, 186,290 refugee pupils were reportedly enroled at government and private schools at the elementary and preparatory levels, while 39,942 non-refugee pupils attended UNRWA schools. In all five fields of operation, UNRWA's basic education programme continued to be carried out in accordance with host authority education systems. Senior Agency staff in all fields continued to participate in educational development activities of host authorities, particularly in forums dealing with policies that might affect the Agency's education programme.

According to the report, UNRWA's health programme remained focused on comprehensive primary health care, including a full range of maternal and child health and family planning services, school health services, health education and promotion activities, and specialist care, with an emphasis on gynaecology and obstetrics, paediatrics and cardiology. However, the health

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programme continued to be negatively affected by the austerity and other cost reduction measures implemented since 1993 in response to funding shortfalls. The Agency continued to pursue cost containment and efficiency enhancement measures in the health programme to make the best use of the limited resources available.

Regarding relief and social services, the report says there were 3.52 million Palestinian refugees registered with UNRWA on 30 June 1998, an increase of 3.0 per cent over the figure from the year before. UNRWA continued to assist refugee families unable to meet basic needs for food, shelter and other life essentials through the special hardship programme. The number of refugees in households meeting the stringent eligibility criteria -- no male adult medically fit to earn an income and no other identifiable means of financial support above a defined threshold -- increased by 5.6 per cent. Under its poverty alleviation programme, UNRWA continued to assist disadvantaged refugees, especially women, to raise their socio-economic status through skills training, production units, group-guaranteed savings and loan schemes, and credit provision. The programme focused on special hardship cases with a view to enabling them to achieve a level of income sufficient to be removed from the hardship rolls.

Furthermore, UNRWA's income-generation programme continued to support small-scale and micro-enterprises within the refugee community by providing capital investment and working capital loans through field-based revolving loan funds, and by providing technical assistance, the report stated. The programme aimed to create and maintain jobs, generate income for participants, support sustainable enterprises, and encourage the participation of women in economic life. In the Gaza Strip, where UNRWA's income-generation efforts were concentrated, business activity was heavily influenced by closures and movement restrictions, which contributed to unemployment, hindered movement of finished goods and raw materials, and increased business costs.

The report stated that most of the 365,000 Palestine refugees registered in Lebanon faced deplorable living conditions and depended almost entirely on UNRWA for basic services. The deteriorating socio-economic situation in the country, combined with the inability of those refugees to gain full access to the job market or to avail themselves of public health facilities, heightened their desperation and misery. Since the resources available to UNRWA were insufficient to cope with the growing needs of the refugee community in Lebanon, the Agency launched a special emergency appeal on 10 July 1997 at Geneva, seeking $11 million in additional contributions to support essential health, education, and relief and social services activities. Eight countries and one intergovernmental organization responded generously to the appeal, announcing total pledges of $9.3 million by 30 June 1998.

On legal matters, the report states that the number of UNRWA staff members arrested and detained throughout the area of operations increased from 44 in the previous reporting period to 61 in the current reporting

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period, although most staff members were released without charge or trial after relatively short periods of detention. The Agency was not always provided with adequate and timely information by the relevant authorities -- both Israel and the Palestinian Authority -- as to the reasons for the arrest and detention of its staff members. UNRWA was for the first time able to obtain access to all Palestinian Authority detention centres in the Gaza Strip to visit detained staff members. However, it was only possible to visit staff detained in the Gaza Strip after long delays, sometimes over a year, particularly at facilities other than Gaza Central Prison.

The procedures imposed by the Israeli authorities on security grounds to regulate entry to and exit from the West Bank, Gaza Strip and entry to Jerusalem remained in place during the reporting period, the report stated. Following incidents of violence or as a preventive security measure, the Israeli authorities imposed full closures of the West Bank and/or Gaza Strip on several occasions during the reporting period, lasting for a total of 57 days.

The Committee also had before it the report of the Secretary-General on persons displaced as a result of the June 1967 and subsequent hostilities (document A/53/471). It states that the Secretary-General addressed a note verbale to the Permanent Representative of Israel to the United Nations, in which he requested the Permanent Representative to inform him on any action his Government had taken or envisaged to take in implementation of the relevant provisions of General Assembly resolution 52/59 of 10 December 1997 which reaffirms the right of all persons displaced as a result of the June 1967 and subsequent hostilities to return to their homes or former places of residence in the territories occupied by Israel since 1967.

In a 19 August 1998 response by Israel to that request, its Permanent Representative replied that resolutions regarding UNRWA remained rife with political issues irrelevant to the work for which the Agency was responsible, and thus remained detached from the reality in the area.

"The agreements between Israel and Palestinians mark significant progress in the framework of the peace process", he writes. "Israel believes that this process is the only way to achieve historic reconciliation and lasting peace between the two sides. However, for this process to succeed, it is imperative that both sides abide by their commitments and to resolve all outstanding issues through negotiations.

"Israel believes that UNRWA can play an important role in promoting the social and economic advancement foreseen in the agreements between Israel and the Palestinians, within the limits of its humanitarian mandate, and accordingly looks forward to continuing the cooperation and good working relationship with UNRWA."

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The report further states that the Agency would not necessarily be aware of the return of any registered refugees who did not request the provision of services. So far as is known to the Agency, between 1 July 1997 and 30 June 1998, 534 refugees registered with UNRWA returned to the West Bank and 177 to the Gaza Strip. It should be noted that some of those may not themselves have been displaced in 1967, but might be members of the family of a displaced registered refugee whom they accompanied.

According to the report of the Secretary-General on offers by Member States of grants and scholarships for higher education, including vocational training for Palestine refugees (document A/53/472), Japan awarded 11 fellowships through UNRWA to Palestine refugees in 1997/1998. Switzerland contributed some $1.7 million between 1989 and 1996, as well as $338,000 in 1997, to the UNRWA university scholarships programme for secondary school graduates.

The report further says that during the biennium 1997-1998, the United Nations Educational, Scientific and Cultural Organization (UNESCO) granted seven scholarships in favour of Palestinian students. The World Health Organization (WHO) provided 50 fellowship/study tours for qualified Palestinian candidates nominated by the Palestinian Authority. Meanwhile, the United World Colleges (UWC) established their own selection committee in UNRWA's area of operation, and have therefore not offered any scholarships through UNRWA for the 1997/1998 academic year. One scholarship, however, has been offered through UNRWA for 1998/1999 and is currently being processed.

According to an annex in the report of the United Nations Conciliation Commission for Palestine (document A/53/518 and Corr.1), the United Nations Secretariat has engaged a contractor for the modernization of the existing records and the project will be completed in early 1999. The Commission has authorized access by the designated representatives of the Palestine Liberation Organization to its land records in the United Nations archives for the purpose of making a scanned image of those records.

The Committee also had before it the report of the Secretary-General on a University of Jerusalem "Al-Quds" for Palestine refugees (document A/53/551).

At the Secretary-General's request, the Rector of the United Nations University made available a highly qualified expert, Mihaly Simai, to assist in the preparation of the study, the report states. The expert was to visit the area and meet with Israeli officials. In a note verbale dated 25 August 1998 addressed to the Permanent Representative of Israel, the Secretary-General requested that the Government of Israel facilitate the visit of the expert.

The report states that on 10 October, the Permanent Representative of Israel informed the Secretary-General that Israel has voted consistently

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against the Assembly's resolution on the proposed university, and its position remained unchanged. "It is clear that the sponsors of this resolution seek to exploit the field of higher education for political purposes totally extraneous to genuine academic pursuits", he writes. Accordingly, Israel considers that the proposed visit "would serve no useful purpose".

PETER HANSEN, Commissioner-General of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), said that during the period under review, the Agency's operating environment had been marked by a lack of progress in the Middle East peace process, with resulting tension and frustration in the Palestine refugee community. The UNRWA therefore welcomed the recent Wye River Memorandum and hoped that its implementation would be smooth. Courage was required on both sides to put an end to the cycles of violence, which wrought havoc on human life, tore apart family and society and set back the peace process. With all its difficulties and challenges, there was no alternative to peace, despite the tragic events of the last two weeks.

He said that in general, living standards in refugee communities remained poor, characterized in some fields by high unemployment, falling household income, overburdened infrastructure, and restrictions on unemployment and mobility. In Jordan, where 1.4 million Palestine refugees lived, the host Government spent more than $300 million annually on refugees, an amount that was almost equivalent to UNRWA's cash budget for all five fields. In comparative terms, the refugees in Jordan were the best off in any field, enjoying full access to Government and international efforts to introduce a social security package to improve socio-economic conditions.

The 365,000 Palestine refugees registered in Lebanon continued to suffer from extremely poor living and housing conditions, unemployment rates of 40 per cent and restrictions on mobility and economic activity, he said. The UNRWA remained the main provider of services to the refugees, whose access to public education and health care was rather limited. Many refugees had suffered multiple displacement in the last two decades. As UNRWA's ability to meet the needs of the refugees was curtailed by scarce resources, a 1997 appeal to finance those emergency and mid-term needs which could not be covered from UNRWA's regular budget had resulted in a generous response by donors of $10 million.

He said that Syria provided the 365,000 Palestine refugees living there with many of the benefits available to its own citizens. The 555,000 refugees in the West Bank represented 30 per cent of the population; the 773,000 refugees in the Gaza Strip formed almost 76 per cent of the population. While the Palestinian Authority had its own institutions, structures and services, those were separate from those of UNRWA, and catered to non-refugees. The Authority and UNRWA had differing and distinct roles. That point was made to clarify that resources transferred from UNRWA did not make their way to Palestine refugees via any other vector.

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The Agency's relations with the Palestine Authority and the Palestine Liberation Organization (PLO) continued to be close at all levels, he said. It was hoped that a pending problem, that of Value Added Tax reimbursement to UNRWA by the Authority, would soon be resolved. That amount, which increased each month, as did "lost" interest, was now almost $20 million. That was virtually the same amount as UNRWA's core deficit in 1996, 1997 and 1998, and represented funds which the Agency desperately needed at a time when the monthly payroll for 22,000 Palestinian staff could not always be guaranteed.

He said that freedom of movement of UNRWA Palestinian staff continued to be a problem as a result of procedures imposed by Israeli authorities on security grounds to regulate the entry to and exit from the West Bank and Gaza Strip. Those included systems of permits, checkpoint controls and searches of Agency vehicles, occasional closures of the West Bank and Gaza Strip and restrictions across the Allenby Bridge. Last year, a new restriction had been introduced whereby Palestinians with West Bank or Gaza residency required an additional security clearance to drive a vehicle in Israel. As a result, movement of Agency staff and vehicles was impeded and often prevented, leading to disruption of operations. That situation was exacerbated by full closures following incidents of violence or which were imposed as a preventive security measure. Internal closures in the West Bank, sometimes concurrent with a full closure, affected movement and operations within the West Bank.

Among UNRWA's achievements in education was the Agency's contribution to keeping the Palestinian cultural identity alive; making Palestine refugees the most highly educated group in the region; reaching education for all even prior to the UNESCO target date of the year 2000; enrolling more than 50 per cent of girls in Agency schools; setting up the first residential vocational training centre for women in the Middle East; achieving 98 per cent retention rates and very low drop-out rates in Agency schools; and training generations of refugee youth in UNRWA vocational and teacher training centres to help them to earn a livelihood and assist extended families, and support the economic infrastructure in the region.

In health, he said, UNRWA had reached a number of important goals ahead of the WHO target dates, including goals in infant mortality, dental health and eradication of certain communicable diseases. For example, ease of access to health care had led to infant mortality rates in refugee camps in Gaza being significantly lower than among non-refugees in Gaza and the West Bank. The cost-effectiveness of UNRWA's health services had been repeatedly affirmed by independent assessments by WHO and the World Bank.

Regarding social services, UNRWA had been the first to set up a network of community centres, which had become largely self-sustaining, for women, youth, and the disabled, he said. The UNRWA's income-generating programme was the largest private credit scheme in the Gaza Strip, while the Agency's poverty alleviation programme, aimed at the most vulnerable segment of the

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refugees, helped to supplement or generate a small income and provide a measure of self-reliance in poor refugee families.

Lest those achievements give the impression of a passive community living on welfare, he said, the Palestine refugees bore a fairly large share of the burden of their daily lives themselves. They contributed cash, goods and labour to community projects; they often ran their own schools and community centres; the well-off Palestinians, refugees and non-refugees, fully financed or subsidized an number of activities in the region; even the poor refugees made a modest contribution, for example in paving camp sidewalks and school playgrounds.

He said he did not wish to give the impression that all was well. The UNRWA was in the fifth year of a downward spiral of declining income and increasing needs. Austerity measures originally introduced in 1993 on a temporary basis had had to be maintained. The Agency's working capital was reduced to $400,000 and could no longer provide a cushion for cash flow problems. The UNRWA's deficit for this year was expected to be some $62 million. By freezing or cutting expenditure lines, the Agency would manage to get by at a reduced level of $252 million in expenditures, against budgeted needs of $314 million. The UNRWA's current three-year mandate would expire in June 1999. With the important role the Agency continued to play in the region, it was hoped and expected that its mandate would be renewed for another term. In the immediate future, UNRWA's financial deficit remained its most pressing problem.

SVEIN AASS (Norway), speaking in his capacity as Rapporteur of the Working Group on financing of UNRWA, said the Working Group had followed with concern the serious financial situation that continued to face the Agency. It feared that the budget deficit of $61.5 million for 1997 and the introduction of new austerity measures would not allow the Agency to fulfil its mandate, and would negatively affect its humanitarian programmes. The financial prospects after five years of austerity measures had eroded the quality and level of service to the 3.5 million refugees.

The financial situation would also hamper the Agency's ability to account for the natural growth of the refugee population, he said. The Working Group had appreciated UNRWA's efforts to deal with its structural problem, and commended the Agency's staff for its efforts to maintain its quality of service despite the financial constraints on availability of resources. The Group also commended UNRWA's fundraising efforts, as well as the cooperation between the Agency and the host countries for the refugees. It was, however, unfortunate that the higher number of case loads for social workers dealing with the poorest of refugees, along with the education and health care of the refugees, would suffer due to the economic hardships.

The UNRWA played a vital role in the security of the region, he said. The problem in the Middle East was deeply rooted in political issue which had

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begun half a century ago and needed to be settled once and for all. The effort to solve the problem must be a shared international responsibility. The Working Group therefore urged all donors, host countries, and countries not involved to step in and realize their collective responsibility to cover the current deficit and fulfil Agency mandates and programmes without any further cuts.

NASSER AL-KIDWA, Observer for Palestine, said it was a depressing and unfortunate reality that this year marked a half-century of the plight of the Palestine refugees, who remained scattered throughout the five fields of the UNRWA operations and beyond, awaiting the just resolution of their plight.

The General Assembly had annually reaffirmed the right of the Palestine refugees to return to their homes and properties and to compensate those who choose not to return, he said. The General Assembly had annually reaffirmed that right. It was an inalienable right which had not diminished with the passage of time. Furthermore, that right should not be confused with the right of displaced people to return to the territory occupied by Israel since 1967 -- which had been affirmed by the Security Council -- and should have been effected during the transitional period of the peace process, but which unfortunately had not happened yet due to the lack of Israeli compliance.

The continuing importance and centrality of the UNRWA in the lives of the refugees could not be overemphasized, he said. Consequently, the severe financial difficulties which faced the Agency were a grave concern. The continuing and widening gap between the financial resources available to the UNRWA and the needs of the 3.5 million Palestine refugees was a serious dilemma fraught with both short-term and potentially grave long-term negative consequences. For humanitarian reasons, and also because of the negative political meaning it would convey to the Palestine refugees, the Palestine delegation opposed any decrease in the services of the UNRWA. Allowing financial burdens to become the foremost consideration of the Agency was unfair to the refugees that UNRWA was mandated to serve. The Agency should not be forced to operate solely on the basis of availability of funds.

The grave deterioration of the situation on the ground -- a result of the protracted deadlock in the peace process and the polices and practices of the occupying Power -- served as a glaring reminder of the continuing and urgent needs of the refugees, he said. The deterioration had resulted in a worsening in the daily life of the Palestinian people, with despair and frustration most prevalent among the Palestine refugee population in the Occupied Palestine Territory, including Jerusalem. The refugees continued to face severe socio-economic hardships, including very high unemployment and a decline in household income. Moreover, the operations of the Agency in the Occupied Palestinian Territory continued to be obstructed by measures imposed by the Israeli authorities, such as the recent closures, which had restricted the movement of the UNRWA staff and vehicles, and had affected the provision of services to the Palestine refugees.

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HASSAN ABU-NIMAH (Jordan) said that since its inception, the UNRWA had proved to be one of the most successful United Nations bodies in terms of providing health, education and social services to refugees despite its dwindling finances. The Palestinian question was the crux of the Arab-Israeli question and peaceful settlement of that problem was at the heart of that issue. The fact of the continuing refugee problem would ensure continuing instability in the region. It was a source of concern that no real achievement had been made in bilateral and multilateral negotiations and that situation must be redressed.

He said that after five decades of the Palestinian refugee tragedy, the UNRWA was still delivering its services to the refugees, confirming the international community's continuing concern for the Palestinians. As long the refugee question was not solved, the Agency's presence was fundamental in providing services that should be in line with the annual 5 per cent increase in the number of the refugee population.

Being the host of the largest number of refugees since 1948, Jordan had been more affected than any other host country, he said. Jordan's policy was built on the right of every individual to a dignified life. It dealt with the humanitarian dimensions of the Palestinian question. The critical financial situation of the UNRWA still threatened its services given the gap between its income and expenditure, which was having a negative impact on the quality and quantity of those services.

He said that the peace process needed support in the face of threats and obstacles. Achieving the final goals of the peace process required the efforts of all Member States. Failure to deliver would create disappointment and make the entire situation even more prone to violence.

ANWARUL KARIM CHOWDHURY (Bangladesh) said the activities of UNRWA reflected the commitment of the world community to look after the welfare of the 3.5 million Palestine refugees registered with UNRWA. In his report, the UNRWA's Commissioner-General, Peter Hansen, had underscored the funding shortfalls in the regular budget that continued to negatively affect the activities of the Agency, thereby seriously jeopardizing the well-being of the Palestine refugees. Bangladesh was concerned that the financial crisis and resource constraints of the Agency necessitated changes in some of the basic services of UNRWA in the fields of health and education.

The Peace and Implementation Programme of UNRWA deserved encouragement, as it contributed to the quality of life of the Palestine refugees, he said. Since the Programme's inception in 1993, a total of 332 projects had been funded, resulting in maintenance or upgrading of existing facilities to an adequate standard. Moreover, Bangladesh believed that the recent signing of the Wye River Agreement would bring fresh hope for the refugee communities in the region. However, progress in the peace process should not automatically result in the scaling down of UNRWA activities. The level of services for

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Palestine refugees should continue until the refugee issue was fully resolved and UNRWA activities were smoothly taken over by Palestine. Bangladesh was also very concerned that in the name of imposing security procedures, continuous impediments had been created, causing dislocation in the operation of the Agency.

MAGED A. ABDELAZIZ (Egypt) said that all the parties striving to achieve a lasting, just and comprehensive peace in the Middle East and a comprehensive settlement of the Palestinian question in all its aspects were aware of the vital importance and the necessity of the services that UNRWA provided to the Palestinian people in all areas. Those services were increasing in importance during the current transitional period and up to the conclusion of the final status negotiations which, it was expected, would reach a just settlement of the refugee question. In that regard, Egypt noted with increasing concern the continuing and deepening precarious financial situation of the Agency.

He said peace was still from far being achieved, and the final status negotiations -- which were expected to be arduous and prolonged -- had not yet commenced. The Palestinian people -- and the Palestine refugees specifically -- needed sustained international support today more than what had been needed before. There were needs, invoked by the responsibilities of self-rule on the one hand, and by oppressive measures imposed by the Israeli authorities on the other, which needed to be addressed. It was imperative that the international community -- and specifically the major donor parties, whether they be States or financial institutions -- did not abandon the Palestinian people in their difficult economic, political and social situation.

Egypt considered that responding to the needs of the Palestine refugees, developing the necessary services provided to them and furnishing them with a minimum standard of living would all have a positive impact commensurate to the level of their support for the peace process, he said. The opposite was also true, whereby depriving the refugees of basic services and retreating from responding to their problems -- not because of the shortcomings of UNRWA or its employees, but as a result of the decline in its resources -- would not only diminish the level of support, but would also render many of them victims of extremism and violence.

FAYSSAL MEKDAD (Syria) said it was evident that the Government of Israel encouraged Jews from around the world to come and settle in Arab territories. Israel had continued its disregard for the rights of the Palestine refugees -- who had been uprooted by terrorism and murder, and driven from their ancestral land -- and posed a blatant challenge to United Nations, Geneva Convention and other international treaties. Israel had not allowed, nor did it intend to allow, the refugees to return to their homes. The Palestine refugees had inalienable rights to their homeland.

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That persistent challenge had caused the general problems in the region, he said, noting that the refugee issue was the crux of the problem in the Middle East. It was important not to disappoint the millions of refugees and aggravate or prolong their suffering. However, it had become clear that the current Israeli Government had continued to hamper the Middle East peace process, and had reneged on its obligations. Such behaviour ran counter to the current efforts and threatened more waves of destruction and violence -- especially the practice of supporting more Jewish settlements among the Palestinian people and in the Palestinian lands.

KARIN PROIDL (Austria), speaking on behalf of the European Union and associated States, noted that UNRWA had used the impetus provided by its financial crisis to rethink methods of operation with a view to finding means to fulfil its programme goals in a more sustainable and cost-effective manner. The Union noted with appreciation the tangible process achieved in combating the ongoing deficit problem, while the reform effort initiated in the previous reporting period continued to produce results.

The Union encouraged the Commissioner-General and his team to continue their efforts towards increased transparency and higher cost-effectiveness through new approaches to traditional programme activities, while maintaining the quality and level of the Agency's services, she said. In that context, last year's controversy surrounding austerity measures relating to hospitalization and school charges had subsided through the generous financial support of the international community. The international donor community had underlined its deep commitment to stand by the Palestine refugees while the region was striving for durable peace.

She said that few would have predicted when it was first established that UNRWA would be required to remain in existence for about 50 years. Nevertheless, as the fiftieth anniversary of its foundation approached, the world must remain conscious that the Agency had been established to provide assistance only of a temporary nature and that it had not been intended to be a substitute for a political solution to the refugee problem. The Union earnestly hoped that a political solution to the refugee problem would come soon as part of a comprehensive, just and lasting peace in the area, so that the conclusion of UNRWA's mandate and the transfer of its functions to the Palestinian Authority would be possible.

The European Union warmly welcomed the signing of the Wye River Memorandum on 23 October between Prime Minister Benjamin Netanyahu of Israel and Chairman Yassir Arafat of the Palestinian Authority, she said. That event opened the doors for an early resumption of the final status negotiations as foreseen in the Oslo Accords, as well as the implementation of the outstanding commitments under the Interim Agreement. The Union remained deeply committed to the Middle East peace process and was determined to continue playing its full part, enhancing that process in all its aspects.

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She said UNRWA's efforts in the fields of health, education and social assistance constituted an important stability factor for the peace process which could not be overestimated. It was the responsibility of all United Nations Member States to provide UNRWA with the appropriate resources to carry out its functions until such time as a comprehensive, just and lasting settlement had been found to the political problems which had led to the presence of Palestine refugees in the Near East.

YAW OSEI (Ghana) said pending a peaceful settlement of the Palestinian problem, the international community had a moral responsibility to support UNRWA in its invaluable role of catering to the welfare of the Palestine refugees and enhancing socio-economic conditions in the refugee camps. The United Nations could not ignore the Commissioner-General's concerns, raised in his report, which drew attention to the Agency's worsening financial situation which compelled the institution to adopt austerity measures and affected the quality and level of some services at a time of steady increases in the refugee population.

Ghana noted with appreciation the tireless work of the UNRWA staff in the face of such financial constraints, he said. He also drew attention to the contributions of donor countries to help sustain the level of services to the refugees and the efforts of the Working Group to help eliminate the structural deficit problem which had plagued the Agency in previous years. His country also congratulated the Government of the United States in facilitating the talks between Palestine and Israel, and urged all sides to work assiduously to honour the commitments of the Wye River Memorandum.

RAMLI AHMAD (Malaysia) said his delegation was concerned about the continued interference by the Israeli authorities in UNRWA's operations. They had on numerous occasions imposed restrictions on the movement of Agency staff and Palestinian people to and from the West Bank and Gaza Strip, ostensibly on security grounds. Those restrictions, coupled with Israeli closures of the West bank and Gaza Strip, had not only adversely affected the work of UNRWA, but had exacerbated further the already deteriorating socio-economic conditions of the Palestinian community. Malaysia found that situation unacceptable.

He welcomed the signing of the Wye River Memorandum on 23 October, saying it was an important breakthrough in efforts to revitalize the stalled Middle East peace process. It was hoped that the Memorandum would be implemented in full and without preconditions. Its immediate implementation would create an atmosphere of trust and confidence between the parties and would enable them to move forward to the permanent status negotiations, of which the issue of the Palestine refugees was a part.

Malaysia noted with deep concern the serious budgetary and other constraints faced by UNRWA, he said. At the same time, Malaysia highly appreciated the fact that despite those constraints, the Agency remained fully

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committed to bringing about improvements in the socio-economic conditions of the 3.5 million refugees registered with it. The UNRWA's worthy efforts deserved the continued strong support of the international community. The continued financial shortfalls faced by the Agency would adversely affect its activities to improve the well-being of the Palestinians. Such a situation would also have a strong bearing on the peace process.

OLE PETER KOLBY (Norway) said his Government was very much concerned by the fact that some important donors had reduced their contributions, and that others were planning to do so. Norway reiterated its appeal to expand the donor base. Words of solidarity with the Palestine refugees and the political will to participate in the peace process must be accompanied by concrete action in terms of contributions.

The allegations of corruption made against the Lebanon Field Office had received considerable attention during the past weeks, he said. Norway was deeply concerned by those allegations, and appreciated the swift response made by UNRWA's Commissioner-General. The Office of Internal Oversight Service's report had concluded that charges had little basis in reality. Such allegations should, however, not draw attention away from the Palestine refugees depending upon UNRWA's services. Moreover, Norway remained convinced that the fundamental requirement for the peace process to succeed was that it must be seen to yield positive results on the ground and in people's everyday lives. Continued support by the international community for the political process must therefore be accompanied by substantial economic assistance, particularly to the Palestinian people. The UNRWA played a vital role in that context.

RENATO R. MARTINO, Observer for the Holy See, said when acts of violence caused closures, the subsequent system of military checkpoints impacted very seriously on the right to work, negatively affected the distribution of agricultural products and worked against freedom of worship. His delegation hoped the signing of the recent Wye River Memorandum would wipe away some of those injustices. The Holy See recognized the substantial and grave pressures the negotiators of each side had been subjected to, and hoped that the seeds of the solution would not be crushed by extremism or terrorism. Moreover, his delegation urged the international community to support those who had crafted the Wye River Memorandum so that the security for the citizens of Israel, as well as a respect for the fundamental rights of the Palestinians and a recognition of their right to a homeland, would be realized.

In the peace process, the status of the city of Jerusalem had been deferred to the ultimate issue, he said. The status of that city, claimed by two peoples and the patrimony of the three monotheistic religions, must not be

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compromised by pre-emptive actions which were not a part of the agreed upon dialogue. Calling Jerusalem an outstanding religious and cultural centre, he reiterated the appeals of the Holy See to the international community to ensure the avoidance of irreversible solutions which could prejudice the very future of Jerusalem and cause it to lose the universal character which made it a heritage of humanity.

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