As President Mahmoud Abbas continues to prepare the Palestinian bid for "observer" status at the United Nations General Assembly on September 23, some members of congress have threatened to cut off economic and/or security aid to the Palestinian Authority (PA). One might expect this threat to resonate in Ramallah. The PA has long been one of the most aid-dependent administrations in the world and contributing $833 million in 2009, the United States is its largest provider of official development assistance -- outmatching the second largest donor, the United Arab Emirates, by almost a factor of four.

Yet Abbas and his advisors have solidly rebuffed Obama administration pleas and congressional threats to abandon the PA's petition.  Why hasn't the PA been dissuaded by the prospect of less (or no) U.S. aid in one year's time?  Part of the answer, of course, lies in the homegrown political challenges confronting Abbas and his Prime Minister, Salam al-Fayyad -- progress on which seems stagnant relative to the broader "Arab Awakening" in the region. Another part lies in the intransigence of the Netanyahu government, which offers little hope for meaningful negotiations. But the final part of the answer lies in the nature of U.S. aid itself.

Aid is best at buying leverage when it is in high demand by the recipient, unavailable from other donors, and does not directly serve donor interests. In these situations, donors can issue credible threats to withdraw aid if the recipient fails to implement the donor's foreign policy demands. This year, the United States will provide only about $400.4 million* in Economic Support Funds to the PA, much of which is distributed among technical assistance projects that are widely available from other donors. This is not good material for leverage -- Congress ought not bother. The two most important unique contributions that the United States makes to the PA are diplomatic support and security assistance. However, neither is well-suited to pressuring the PA on the statehood bid -- the former because it has proven ineffective, the latter because it serves U.S. and Israeli interests so well. And that leaves the US with few remaining cards to use with a desperate Palestinian leadership. 

The diplomatic failures of U.S. efforts to push for a two state solution have been widely chronicled. It has also fallen short of using its diplomatic power to persuade Arab donors to meet their commitments. Aid from Arab countries has dropped from over $500 million in 2009 to $79 million this year, and the Department of State and its various embassies have been unable to pressure Arab donors to fulfill their pledges. If the United States had the diplomatic weight to compel them, this could be used as leverage. But unfortunately, it does not. It is also unlikely that the Arab countries would buy into a U.S. plan to divert the PA's ambitions for statehood, as Saudi Prince Turki al-Faisal made clear last week.

Nor has the United States been able to persuade Israel to consistently allow promised funds to pass to the Palestinian Authority. The PA has dramatically improved its internal revenue collection, particularly regarding property taxes, but it struggles to pay public servants (including 80,000 security personnel) on a monthly basis. The government remains dependent on the Israeli transfer of customs revenue for about 70 percent of its budget. Israel has often withheld customs transfers as leverage, and in late August, the Israeli Finance Minister rejected the PA's appeal for early payment of NIS 380 million in customs revenue. The PA slashed June salaries by half and delayed payment on July salaries; the PA announced last Tuesday that September salaries would also be cut by half. Over the summer Palestinian officials repeated conveyed to their U.S. and Israeli counterparts that the advances of the past four years will be for naught if the government cannot pay salaries.  U.S. diplomatic pressure has thus proven of little use with either the Arabs or Israel.

That leaves the security assistance. The Jerusalem-based United States Security Coordinator (USSC), established in 2005, assumed its current form in 2007 under the leadership of Lt. General Keith Dayton. Responding to the Hamas takeover of the Gaza Strip, the USSC sought to facilitate PA-Israeli cooperation and allay Israeli fears over the security forces; lead and coordinate international assistance to the security forces; and help the PA professionalize its security sector. The USSC spends about $150 million annually on training, equipping, and advising key elements of the security sector in the West Bank. The principal activity of the mission is to train and equip the Presidential Guard, which provides security for Abbas, and the Palestinian National Security Forces (NSF), a nascent gendarmerie that, upon independence, could become the Palestinian military. As of this past July, the USSC had overseen the training of two Presidential Guard and seven NSF battalions, with an eighth currently undergoing training at the Jordan International Police Training Center. The USSC also finances non-lethal equipment (a requirement of the Congress) for the forces, including riot shields, batons, handcuffs, computers, and support vehicles; builds operations camps and other physical infrastructure; provides technical assistance to the Ministry of the Interior; and offers short officer training courses in the West Bank. The Government of Israel (represented by the IDF J-5) must approve all of the USSC's equipment lists and training programs, and also vets the PA's proposed trainees.

The utility of the USSC to the PA occasionally extends beyond raw numbers. Under Dayton in particular, the USSC also vetted new security arrangements with the Israel Defense Forces (IDF) that would give PA security forces more jurisdiction. One high-profile example is the May 2008 "Jenin First" model in which hundreds of NSF deployed alongside the Presidential Guard and Civil Police to restore law and order to Jenin, a town relatively free of Israeli settlers. Dayton continued to encourage the IDF to reduce daylight incursions into Jenin (which Palestinian forces claimed undermined their legitimacy); allow the import of protective gear; allow new Palestinian-operated checkpoints; and expand the Jenin Model to other areas of the West Bank.

USSC assistance has been beneficial to the United States and Israel. From the U.S. perspective, building Palestinian institutions provides the internal basis for a two-state solution, the stated goal of the Quartet's 2003 Roadmap for Peace. The IDF approve of the security forces' more professional operating style, cooperation in counter-terrorism, and new capabilities in crowd and riot control. The Palestinian forces' imposition of law and order in Hebron's neighborhoods was unprecedented, as was a large-scale round-up of Hamas militants. After the breakdown of the ceasefire and the inception of Operation Cast Lead in Gaza, Palestinian forces allowed peaceful protests in the West Bank while also maintaining public order. With some exceptions, it is now common for the Shin Bet to provide Palestinian security forces with lists of wanted militants, which the Palestinians then arrest. Throughout 2009, Palestinian forces detected and dismantled weapons facilities; arrested and occasionally killed Hamas operatives in the West Bank; and began holding routine meetings with IDF officials.

This improved performance has allowed Israel to reduce its direct presence in the West Bank, even as peace negotiations stalled. In October 2010, the IDF verified that its number of manned checkpoints in the West Bank had decreased from 41 to 14, and in May 2011, Israel deployed the lowest number of soldiers in the West Bank since the beginning of the first intifada. Between 2005 and 2010, the number of terrorist attacks in the West Bank decreased by 96 percent. In May 2009, Dayton made the controversial claim that, "they have made such a difference -- and I am not making this up -- that senior IDF commanders ask me frequently: ‘How many more of these new Palestinians can you generate, and how quickly, because they are our way to leave the West Bank.'" This, of course, provided fodder for Hamas to label Palestinian security officials as collaborators (and consequently incensed the officials), but nonetheless supports the popular rumor that the IDF has an institutional preference to reduce its presence in the West Bank, if it can be done safely.

Abbas's goals in the security sector were also politically instrumental, aimed at creating new, Fatah-oriented security forces sufficiently professional, capable, and well equipped to participate in counterterrorism operations against Hamas operatives, as well as to restore basic law and order to the streets of the West Bank. The heads of all six main security agencies are members of the Fatah Revolutionary Council. These individuals negotiate their budgets not through Interior, but with Abbas himself, and USSC efforts to create a Strategic Planning Directorate at Interior have failed. There have also been news reports that General Intelligence and Preventive Security, which work with the U.S. CIA and are outside USSC purview, engage in the torture of Hamas prisoners. Few would claim that the Abbas-Fayyad reforms are an exercise in successful security sector reform (SSR). In June 2011, the Palestinian Center for Policy and Survey Research found that perception of safety and security stood at 56 percent in the West Bank, as opposed to 80 percent in the Hamas-controlled Gaza Strip. 

Many in congress see the USSC as a card to be played with Abbas because it is a scarce resource that is in high demand by the West Bank government. Yet this is a false lead. Trying to leverage U.S. security assistance is a self-defeating proposition, as David Makovsky of the Washington Institute for Near East Policy argued in congress yesterday. The health of the Palestinian security forces is too wound up with both U.S. interests in the two-state solution and IDF interest in reducing its number of occupational forces. Manipulating these resources -- at least by threatening to decrease them-- is to shoot oneself in the leg. Attacking the aid to the PA might satisfy angry members of congress, but would only undermine its own agenda.

Now is not the time for an untargeted onslaught of congressional hostility to an aid recipient that has, until this one move, done everything right. U.S. material and diplomatic assistance can no longer substitute for decisions that successive Israeli governments have found it politically unfeasible to make. It is now time for Israel to use its own devices and make its own deals, beginning with the obvious: settlements. Settlements are what caused direct negotiations to end, and they are the only issue that Abbas advisors say could bring them back to the negotiating table. Settlements, not security.

* The original post referred to $4.4 million in ESF funds for FY 2011; the actual number, according to the Congressional Research Service is $400.4 million. The first figure is cited from congressional testimony as recorded in the Congressional Record on July 12, 2011 (Testimony of Hon. Jacob Walles, Deputy Assistant Secretary for Near Eastern Affairs, US Department of State, to the House Foreign Affairs Committee). Although official figures for FY 2011 are not yet available from the Greenbook, the $400.4 million figure is corroborated by the FY 2011 Congressional Budget Justification for Foreign Operations. The author stands by the principal claim of the post, which is that security assistance is not effective leverage with the PA. (September 17, 2011)