Mr. Chairman,

I wish to thank you and the esteemed members of your Committee for the privilege of testifying before you.

The situation facing Israel, the Palestinians and all other interested parties, especially the United States, is difficult, but it also presents new opportunities.

I am confident that negotiations will resume soon, with measures in place to maximize the possibility of success. Yesterday’s Arab League decision facilitates Special Envoy Mitchell’s efforts to bring the parties together.

Proximity talks, regional cooperation and more constructive rhetoric by the parties will all help. The PA has initiated an important innovation with regard to Middle East peace: the program issued last August by Prime Minister Fayyad, under the leadership of President Abbas. Palestinians plan to build the institutional, infrastructural and economic foundations of their state, while under occupation, to end the occupation.

All parties, including Israel, say it is their intention to realize the two-state solution. The Palestinians are taking up the responsibilities of self-government as they continue to insist on the right of self-determination.

In extemporaneous remarks at the Herzliya conference last month, Fayyad explained this, and the Israeli leadership in attendance applauded. He addressed accusations of unilateralism by noting that only Palestinians can build their own state.

It must be clearly stated that a Palestinian state can only be established through a negotiated agreement. The Israeli establishment that understands that a peace agreement with the Palestinians is a strategic imperative, should recognize this program as a serious pathway to that end. And there should be no doubt about the negative strategic consequences of thwarting it.

Institution building is not a substitute for diplomacy. They support each other. The PA innovation is to add a bottom-up approach, based on palpable achievements, to top-down diplomacy. Convergence between these two will result in a mutually reinforcing dynamic towards peace.

At the heart of the state-building enterprise are the new Palestinian security forces. Their restoration of law and order, increased security cooperation, along with Israel's removal of several checkpoints, has led to an economic upturn in the West Bank.

This demonstrates what Palestinians can accomplish, and how Israeli concerns can be overcome, given appropriate levels of coordination, international aid, technical support and sustained political engagement. It is vital that Palestinian security forces are allowed access and mobility. Israeli incursions undermine the legitimacy and effectiveness of these forces as state builders.

Despite the harsh realities of daily life under the occupation, conditions have improved in areas under PA control. But significant challenges remain. Last week tensions were raised by Israel's decision to add holy sites in the occupied territories to its national heritage registry.

Continued settlement activity, confrontations in East Jerusalem, excavations near holy sites, evictions of Palestinian families, travel and visa restrictions, belligerent conduct by extremist settlers and sporadic violence by individual and organized Palestinian extremists all undermine the viability and credibility of negotiators and negotiations. In this context, I acknowledge Prime Minister Netanyahu’s intervention to defuse a crisis over building plans in Silwan.

The situation in Gaza is dire. Israel’s blockade has produced a humanitarian tragedy without weakening Hamas control. Isolation helps Hamas increase its hold on the long-suffering people of Gaza and to create a totalitarian theocracy that systematically takes over civil society and harasses international NGOs, the very organizations best placed to lead reconstruction effort.

In short, the people suffer while Hamas benefits politically from this unconscionable blockade. We strongly recommend that reconstruction commence soon and the legal and orderly operation of the crossings be resumed. We also call for ending the frankly mystifying and counterproductive pattern of Israel’s preventing Gaza students from traveling to study abroad.

We commend Congress for the substantial aid it provided to the Palestinians last year. This positive trend needs to be expanded by offering the necessary financial and political support for the PA to successfully pursue the state and institution building program. This is not simply a development project, it is a serious political program that advances a key American national interest.

We believe that this program should be funded by Congress, and that the United States government should lead others to fund and support it as well. We look forward to Special Envoy Mitchell enlisting necessary partners to achieve coordinated political, economic and security progress.

The United States is the indispensable partner that can bring all parties to negotiations and agreement.

I would be happy to answer any questions you might have.

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