Arab ministers discuss funds for Palestinians

CAIRO, Egypt (Reuters) -- Arab finance ministers met on Thursday to discuss how to supply and disburse $1 billion in funds promised at last month's Arab summit to support Palestinians in their uprising against Israel.

Palestinian President Yasser Arafat was expected to address the meeting at the Arab League in Cairo, league sources said.

An emergency Arab summit on October 21-22 resolved to set up an $800 million fund to "retain the Arab and Islamic character of (Arab East) Jerusalem," which the Palestinians want as the capital of a future state.

The summit called for another fund worth $200 million to be set up to support the families of Palestinians killed or wounded in about eight weeks of clashes with Israeli troops.

At least 258 people have been killed in the violence, most of them Palestinians.

At an Islamic summit in Qatar this month, Arafat urged Muslim leaders to give financial aid quickly to bail out the Palestinian economy, ravaged by the conflict with Israel.

On Wednesday, Arafat said about 300 Palestinians had been killed and 11,000 wounded, Egypt's Middle East News Agency reported. He has previously put material losses at more than $900 million.

But while many Islamic leaders have expressed sympathy for Arafat's demands for help, they insist funds must be disbursed directly rather than through the Palestinian Authority, Arab officials at the Islamic summit said.

"Saudi Arabia and Kuwait, the only two countries which had so far made firm pledges of financial support want the funds to work independently of the Palestinian Authority," a Palestinian official at the summit said.

Arafat's administration has been pressed by the international community to improve transparency in the running of its financial affairs and criticized at times for mismanagement and alleged corruption.

Some Palestinians have demanded weapons rather than money to pursue their Intifada, or uprising, against Israel.

Funds from oil-rich Gulf Arab states, formerly the Palestinians' main bankroller, dried up over Arafat's perceived support of Iraq's 1990 invasion of Kuwait.

Palestinian officials have said that only Saudi Arabia, which proposed the funds at the Arab summit, and Kuwait have so far announced firm pledges totalling $400 million.

Saudi Arabia, the world's biggest oil producer and exporter, has announced it will contribute $250 million, while Kuwait has pledged $150 million.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

See related sites about Middle East

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.