US drive nets dollars 2bn for aid to Palestine: Donors at conference pledge cash to back peace deal for next five years

THE US-led drive to underpin last month's historic Israeli-Palestinian agreement with hard cash gathered pace yesterday, as a conference of aid donors pledged dollars 2bn ( pounds 1.3bn) to the Palestinians over the next five years - proof, in the words of the Secretary of State, Warren Christopher, that the international community 'will not let peace fail' in the Middle East.

Speaking after the meeting of representatives of 43 countries assembled in Washington, Mr Christopher claimed it had been 'a striking success', testament to the 'new political landscape' which had emerged in the region. The Treasury Secretary, Lloyd Bentsen, said pledges for the first year alone totalled dollars 600m, and predicted the ultimate five-year sum would come close to dollars 2.4bn, which the World Bank reckons is the minimum needed by the West Bank and Gaza Strip up to 1998.

As if to underline the sudden metamorphosis of the Palestine Liberation Organisation (PLO) from a pariah to a respectable international organisation, Mr Arafat got his invitation last night from the British government to visit John Major and Douglas Hurd in London. And as proceedings unfolded at the State Department, a scarcely less important signal was coming from the White House, where President Bill Clinton hosted talks between Crown Prince Hassan of Jordan and Israel's Foreign Minister, Shimon Peres, the highest-level public meeting of officials from the two countries.

Building on the 'agenda' for bilateral discussions agreed after last month's peace accord, Israel and Jordan are to set up a joint economic committee, while the United States will join them in a tripartite working group to speed the peace process. Key topics will be environmental issues, notably water supplies and joint action to halt desertification of the region.

In the aid package for the Palestinians, the largest single contribution comes from the US with dollars 500m, double its initial promise of dollars 250m. The European Community is pledging dollars 600m while Japan has made a promise of dollars 200m in two years. Canada, the Nordic nations and other industrialised countries have also pledged substantial sums.

Israel itself will commit dollars 25m in grants and dollars 50m in concessionary credits, while after some hesitation Saudi Arabia is chipping in dollars 100m - signalling an end to the aid cut- off imposed by King Fahd after the PLO supported Saddam Hussein in the Gulf war. US officials said that some of the money was ready to spend at once, on homes, schools, and hospitals in Gaza and Jericho, where the autonomy agreement is first to take effect.

But the position of Kuwait, deeply resentful and suspicious after the PLO's pro-Iraq stance and facing a post-Gulf war financial crunch of its own, was still unclear. In separate evidence of how old enmities die hard, the US failed this week to persuade moderate Arab states to drop their economic boycott of Israel.

Neither did Mr Christopher minimise the obstacles ahead. The 'hard work' of reconcilation and rebuilding in Gaza and the West Bank had only begun. 'We must help them quickly,' he said, reflecting widespread fears that without swift action, hope in the occupied territories could quickly turn to disillusion. 'We must demonstrate the tangible benefits of peace, if the advocates of peace are to be strengthened, and the enemies of peace are to be isolated and discredited,' he said.