DRAFT INTERIM ISRAEL-PALESTINE-MFO TREATY OF BUSINESS PEACE
(GAZA MEFTA TREATY)

PREAMBLE

The Government of the State of Israel (hereinafter "Israel") and the future Government of the Federal Arab Republic of Palestine, herein represented by both the Palestine Liberation Organization (hereinafter "the PLO") and the Government of the Palestinian National Authority (hereinafter "the PNA"), (the PLO, the PNA and the future Government of the Arab Republic of Palestine hereinafter jointly "Palestine"), and the Multinational Force and Observers (hereinafter "the MFO");

Aiming at the achievement of a just, lasting and comprehensive peace in the Middle East based on Security Council resolutions 242 and 338 and within the framework of the peace process initiated at Madrid on 31 October 1991;

Israel and Palestine (hereinafter also "the Governments") reaffirming their faith in the purposes and principles of the Charter of the United Nations and recognizing their right and obligation to live in peace with each other, as well as with all states, within secure and recognized boundaries;

The Governments desiring to attain peaceful business coexistence;

Recognizing that without economic security and jobs no peace will be long lasting, and that an expanded international Middle East Free Trade Area (hereinafter "Mefta") in the Gaza Strip under the jurisdiction and administration of the MFO can help generate economic security and jobs in the Gaza Strip as well as the West Bank;

Noting the establishment of Port Mefta in the Gaza Strip and a sunken highway from Port Mefta to the West Bank by the Port Mefta Treaty and Port Mefta Treaty Annex, hereby incorporated by reference to the extent not inconsistent with the provisions of this Treaty, though replaced by this Treaty and its Annex;

Resolved to establish business peace in the Gaza Strip between the Governments beginning with a Palestinian state there in accordance with this Treaty;

Have agreed as follows:

ARTICLE I - Establishment of Palestine in the Gaza Strip

1. The Governments agree that when this Treaty enters into force Palestine shall be established in the Gaza Strip within the boundaries designated in the attached Boundaries Annex, with the attributes and limitations of sovereignty specified in the attached Sovereignty Annex, and independent and free of Israel's economic, political and military control in the Gaza Strip.

2. The Governments shall support a resolution of the Security Council of the United Nations guaranteeing to Palestine that Israel shall observe each of the attributes of Palestine's sovereignty set out in the Sovereignty Annex, including all of the attributes of sovereignty presently exercised by the PNA in the Gaza Strip, plus member seats in the United Nations and other international organizations, and its own currency.

3. The Governments agree that the MFO shall monitor the observance by Israel of each of the attributes of sovereignty of Palestine specified in the Sovereignty Annex, and shall promptly notify the president of the Security Council of the United Nations of any significant evidence of any material breach.

4. Palestine agrees that it shall not have the sovereign right: to heavy military equipment or an air force for self-defense; to forge military alliances or to allow foreign troops and police into its territory; or to block flights over its territory; as specified as limitations of its sovereignty in the Sovereignty Annex.

5. The Governments shall support a resolution of the Security Council of the United Nations guaranteeing to Israel that Palestine shall observe each of the limitations of its sovereignty specified in the Sovereignty Annex.
6. The Governments agree that the MFO shall monitor the limitations of the sovereignty of Palestine specified in the Sovereignty Annex, and shall promptly notify the president of the Security Council of the United Nations of any significant evidence of any material breach.

7. Palestine (including the PLO and the PNA individually) shall forgo a unilateral declaration of a Palestinian state and the Governments agree to periodic final status talks in good faith on the remaining issues until a final annex to this Treaty is agreed to establishing the permanent boundaries of Palestine in the West Bank and its permanent capital, and solving the Palestinian refugee problem.

8. The Governments also agree that such periodic final status talks shall include the issue of temporary boundaries of Palestine in three tunnel-connected sectors of the West Bank with a temporary administrative capital in Abu Dis, to be established within three years from the date this Treaty enters into force, pursuant to an agreed separate annex to this Treaty.

ARTICLE II - Establishment of Business Peace and Security

1. The conflict in the Gaza Strip between Israel and Palestine is hereby terminated and business peace is established between them in the Gaza Strip. The Governments shall maintain normal business relations in the Gaza Strip as set out in Article IV below and the attached Normal Business Relations Annex.

2. The permanent secure and recognized international boundary between Israel and Palestine in the Gaza Strip is the international boundary between the Gaza Strip and Israel specified in the Boundaries Annex.

3. To enhance the security of both Governments, agreed security measures, including limited Palestine armaments, shall be implemented in accordance with Article V below and the attached Security Annex.

4. To encourage normal business relations Israel shall release the Gaza Palestinian prisoners identified in the Normal Business Relations Annex.

5. The time line in the attached Time Line Annex sets forth an agreed schedule for implementation of the Articles of this Treaty.

ARTICLE III - International Boundaries

The international boundary between Israel and Palestine in the Gaza Strip and their territorial waters along the Gaza Strip are as shown on the mapping materials and co-ordinates specified in the Boundaries Annex.

ARTICLE IV - Normal Business Relations

1. The Governments shall apply between them in the Gaza Strip the principles of international law governing peaceful business relations among states. In particular:

a. Israel shall recognize and respect Palestine's sovereignty, territorial integrity, political independence and right to live in business peace in the Gaza Strip within the boundaries specified in the Boundaries Annex as limited by the Sovereignty Annex;

b. Palestine shall recognize and respect Israel's sovereignty, political independence and right to live in business peace, except with respect to the West Bank including East Jerusalem; and

c. They shall cooperate in promoting business peace, stability and development in their region and shall settle all business disputes between them by peaceful means.

2. The Governments shall establish full diplomatic and consular relations, including the exchange of resident ambassadors.

3. The Governments recognize a mutuality of interest in good business relations and for this purpose shall:

a. improve the quantity and quality of legal Gaza Palestinian jobs in Israel subject to the security regulations set out in the Security Annex;

b. improve beneficial bilateral economic and trade relations between them subject to the security regulations set out in the Security Annex;

c. improve relations between them in the sphere of transportation -- specifically, the Governments shall maintain and improve roads and international border crossings, cooperate in the development of rail links and enter into normal civil aviation relations, and Israel shall grant normal access to its ports for vessels and cargoes destined for or coming from Palestine;

d. maintain and improve normal postal, telephone (including mobile telephone), telex, cable, data, facsimile, radio, television, satellite, wireless and other communications between them on a nondiscriminatory basis in accordance with relevant international conventions and regulations; and

e. improve mutual tourism and tourism from third countries.

4. The Governments undertake to ensure mutual enjoyment by each other's citizens of due process of law within their respective legal systems and before their courts.

5. The Governments and the MFO agree that Palestinian refugees living outside of Palestine can only move to the Gaza Strip if they get, or a breadwinner of a moving family gets, a permanent and authentic job in the Gaza Strip.

ARTICLE V - Security Arrangements With Respect to the Gaza Strip

Recognizing the importance of security for both Governments as an important element of business peace and stability with respect to the Gaza Strip, the Governments shall employ security arrangements to build mutual confidence in the implementation of this Treaty and to provide for the security needs of both Governments in accordance with the Security Annex, and in particular –

1. Each Party undertakes to refrain from organizing, instigating, inciting, assisting or participating in any acts or threats of violence against the other Party, its citizens or their property in the Gaza Strip, and shall take effective measures to ensure that no such acts occur from, or are supported by individuals on, its territory. In this regard, without prejudice to the basic rights of freedom of expression and association, each Party shall take necessary and effective measures to prevent the entry, presence and operation in its territory of any group or organization, and their infrastructure, which threatens the security of the other Party by the use of, or incitement to the use of, violent means in the Gaza Strip.

2. Both Governments recognize that international terrorism in all its forms threatens the security of all nations and therefore share a common interest in the enhancement of international cooperative efforts to deal with this problem.

3. The Governments shall establish a direct liaison and coordination mechanism between them as described in the Security Annex to facilitate implementation of the security provisions in this Treaty. Its responsibilities shall include: direct and real-time communication on security issues, minimization of friction along their international border, addressing any problems arising during the implementation process, helping to prevent errors or misinterpretations, and maintaining direct and continuous contacts with the MFO.

ARTICLE VI - Middle East Free Trade Area in the Gaza Strip

1. Palestine, within 90 days after it is established, shall lease to the MFO an area along the coast between Deir El Balah and the southern border of the former Gush Katif, including Port Mefta and excluding Morag, as designated in the Boundaries Annex, to establish and administer a Middle East Free Trade Area (hereinafter "Gaza Mefta") for a period of 35 years (hereinafter "Gaza Mefta Lease"). Just prior to the grant of that lease, Israel shall transfer to Palestine any title to any claimed land in the Gaza Strip by quitclaim deed. Gaza Mefta shall be a free trade area/special economic zone open to companies of all nationalities to do low-labor-cost free trade business pursuant to the attached Gaza Mefta Treaty Annex. In return for the lease, the MFO shall pay to Palestine 20 percent of all rentals paid by acceding parties to this Treaty for land sites for such parties and their companies they designate to construct buildings in Gaza Mefta. The lease shall automatically be renewed for successive 15-year periods unless Palestine, for any reason, terminates the lease on five years' written notice. Upon termination of the lease the entire area of Gaza Mefta, including Port Mefta, and its harbor and all other infrastructure and buildings shall come under the sovereignty of Palestine as defined in the Sovereignty Annex. The MFO agrees that Palestine and its companies shall have normal access to the harbor in Port Mefta at operating cost and Palestine agrees to limit its Gaza City harbor to fishing vessels.

2. The Governments and the MFO agree that the MFO shall ensure equal treatment in Gaza Mefta to Palestine and Israel. In particular:

a. the MFO international police force shall include equal numbers of former Palestinian and Israeli police in addition to MFO nations' police and police of the Arab Republic of Egypt (hereinafter "Egypt") and the Hashemite Kingdom of Jordan (hereinafter "Jordan"); and

b. the MFO shall provide to Palestine and Israel equal areas of land sites free of rent for them and their companies they designate to construct buildings.

3. The Governments and the MFO agree that all nonexecutive labor, as defined in the Gaza Mefta Treaty Annex, employed by businesses in Gaza Mefta shall be Palestinians approved by Palestine, and Palestine agrees that the wage for each such laborer shall not be greater than the average wage for corresponding Palestinian labor in the Gaza Strip.

4. The Governments agree that in Gaza Mefta the MFO shall have exclusive jurisdiction over all non-Palestinians and non-Israelis.

5. The Governments agree that in Gaza Mefta the MFO shall have exclusive jurisdiction over the crimes of terrorism and smuggling (as defined by the MFO), crimes and civil disputes involving citizens other than Palestinian and Israeli citizens, and crimes and civil disputes between an Israeli citizen and a Palestinian citizen. The MFO agrees that, except for the crimes of terrorism and smuggling, Israel shall have exclusive jurisdiction over crimes and civil disputes solely involving Israeli citizens and Palestine shall have exclusive jurisdiction over crimes and civil disputes solely involving Palestinian citizens.

6. The Governments and the MFO agree that after Gaza Mefta is established, Palestine shall join it as part of a duty-free common economic area in the Gaza Strip with common business laws pursuant to the Gaza Mefta Treaty Annex, and Palestine shall be enclosed along its land boundary by an anti-smuggling barrier pursuant to the Security Annex. Thereafter the flow of goods from Palestine to Israel shall be subject to Israel customs, quotas and regulations as set forth in the Normal Business Relations Annex.

7. The Governments and the MFO agree that Port Mefta shall continue to provide a terminus for a sunken highway and accompanying desalinated water pipe and electricity/communication lines and towers (hereinafter "highway facilities") to a terminus near Hebron, and Palestine (including the PLO and PNA individually) and Israel shall grant 35-year easements to the MFO for the highway facilities, and also 35-year easements to the MFO for an extension of the highway facilities to the border of Jordan. These easements shall automatically be renewed for successive 15-year periods unless Israel or Palestine, for any reason, terminates either or both easements on five years' written notice. The Governments shall delegate sole surface patrol of the highway to the MFO.

ARTICLE VII - Water

1. The Governments recognize that full resolution of water issues between them in the Gaza Strip constitutes a fundamental element in ensuring business peace there.

2. The Governments shall establish a Joint Water Committee and cooperate on water-related matters in the Gaza Strip in cooperation with the MFO pursuant to the attached Water Annex.

3. The Governments agree to jointly support the construction by the MFO in Gaza Mefta of a power/desalination plant as specified in the Water and Gaza Mefta Treaty Annexes.

4. The Governments agree to jointly support the development of natural gas deposits in the territorial waters of Palestine; and the power/desalination plant shall be entitled to priority in the use of such gas and at a price equal to production cost excluding donated capital expenditures.

ARTICLE VIII - Rights and Obligations

1. This Treaty does not affect and shall not be interpreted as affecting in any way the rights and obligations of the Governments under the Charter of the United Nations.

2. The Governments undertake to fulfill in good faith their obligations under this Treaty, without regard to action or inaction of any other party and independently of any instrument external to this Treaty.

3. The Governments shall take all the necessary measures for the application in their relations of the provisions of the multilateral conventions to which they are or become parties, including the submission of appropriate notification to the Secretary General of the United Nations and other depositories of such conventions. They shall also abstain from actions that would curtail the rights of either Government to participate in international organizations to which they belong in accordance with the governing provisions of those organizations.

4. The Governments undertake not to enter into any obligation in conflict with this Treaty.

5. Subject to Article 103 of the United Nations Charter, in the event of a conflict between the obligations of the Governments under this Treaty and any of their other obligations, the obligations under this Treaty shall be binding and implemented.

ARTICLE IX - Legislation

The Governments undertake to enact any legislation necessary in order to implement this Treaty, and to repeal any legislation that is inconsistent with this Treaty.

ARTICLE X - Settlement of Disputes

Disputes between the Governments arising out of the interpretation or application of this Treaty shall be settled by negotiation with the help of the good offices of the MFO.

ARTICLE XI - Final Clauses

1. This treaty shall be signed by Israel, the PNA, the PLO and the Director-General of the MFO and ratified by both Israel and the PNA in conformity with their respective procedures. It shall enter into force for a period of 35 years on the exchange of instruments of ratification and shall supercede all previous bilateral agreements between the Governments to the extent applicable solely to the Gaza Strip, and also supercede the Port Mefta Treaty and Port Mefta Treaty Annex.

2. Any nation that desires that it and its companies do business in Gaza Mefta may accede to this Treaty by depositing instruments of accession with Palestine, Israel and the MFO.

3. The Annexes attached to this Treaty shall constitute integral parts thereof.

4. The Treaty shall be communicated to the Secretary General of the United Nations for registration in accordance with the provisions of Article 102 of the Charter of the United Nations.


DONE THIS_______ DAY OF _______ IN ______ IN THE ENGLISH, ARABIC AND HEBREW LANGUAGES, ALL LANGUAGES BEING EQUALLY AUTHENTIC. IN CASE OF ANY DIVERGENCE OF INTERPRETATION, THE ENGLISH TEXT SHALL BE AUTHORITATIVE.