JERUSALEM — Palestinian Authority President Yasser Arafat grappled Sunday with a new crisis: how to meet his payroll after Israel made good on a threat to withhold millions of dollars from his government in the wake of last week's devastating market bombings.
The action, one of several punitive measures Israel announced after Wednesday's attack here, left the Palestinian Authority unable to meet its $40-million payroll, now overdue to about 80,000 Palestinian police officers and civil servants. On Friday, Israel withheld $25 million in tax revenues it owed the authority.
"The Palestinian Authority was barely making it even before this," said Salam Fayyad, the International Monetary Fund's representative in the Gaza Strip and West Bank. "I don't see how this can be sustained."
As the Palestinians scrambled, halting all nonsalary payments in an attempt to make the payroll, U.S. officials expressed concern that the financial squeeze could undermine any effort by Arafat to follow through on Israeli demands for a crackdown--by the very security forces owed paychecks--against Islamic militants. The U.S. has urged Israel to "be flexible" on the financial issue, one official said.
But amid widespread fears of further attacks, Israel showed no sign of backing down--on that issue or anything else. Prime Minister Benjamin Netanyahu, already on the offensive against Arafat in a battery of recent interviews, hammered away at the Palestinian leader again Sunday.
In an appearance on the CBS-TV program "Face the Nation," Netanyahu said the future of Middle East peace depends on whether Arafat mounts an immediate, comprehensive campaign against Islamic militants who attack Israeli civilians in an effort to scuttle the peace accords. Last week's twin bombings killed 15 people, including the two bombers, and wounded nearly 170.
"We expect the Palestinian Authority to do what it hasn't done so far," the Israeli leader said. "That is, to make an all-out effort, an all-out sweep to round up the terrorists, the leaders, and interrogate them."
Arafat, Netanyahu said, "must make a choice and must make it now."
*
The U.S. too is urging the Palestinian leader to cooperate more fully with Israel on security matters and take concrete steps against terrorism. U.S. special envoy Dennis B. Ross, who postponed a scheduled trip the day after the bombings, is expected to arrive late this week for a visit that will now focus primarily on Israel's security concerns.
