U.S. economic coordinator appointed

WASHINGTON -  Outgoing World Bank President James Wolfensohn was named on Thursday as an international "special envoy" to help coordinate economic and political aspects of Israel's planned withdrawal from the Gaza Strip.

U.S. Secretary of State Condoleezza Rice said his task would include reviving the Palestinian economy and issues like the fate of Israeli housing blocks if Israel carries out its plan to evacuate all 21 settlements in Gaza and four of 120 settlements in the West Bank.

Rice made the announcement on behalf of the "quartet" of Middle East peace mediators that includes the United States, the European Union, Russia and the United Nations and said Wolfensohn would report to that group.

She said he would try to rebuild Israeli-Palestinian trust.

"The parties have shown good faith and political courage in recent months. But the obstacles before them remain substantial," she said.

'We welcome the appointment'

Rice defined Wolfensohn's role more narrowly, and said he would serve on behalf of the quartet and made clear it was ultimately up to the Israelis and the Palestinians to work out the Gaza withdrawal and to make peace if they can.

"The responsibility for peace ultimately rests with the two parties and Mr. Wolfensohn can only help them achieve what they are willing to achieve together," she said.

Rice added he would encourage more Israeli-Palestinian contacts to try to ensure "a smooth transition" in Gaza and parts of the West Bank.

"As special envoy for Gaza disengagement, Mr. Wolfensohn will focus his efforts on two areas: first Palestinian-Israeli coordination concerning the nonmilitary aspects of the withdrawal, including the disposition of the assets that will be left behind, and second, the revival of the Palestinian economy in the wake of the withdrawal," she said.

The idea to appoint an economic coordinator to the region was raised by Vice Premier Shimon Peres during his recent meeting with U.S. Vice President Dick Cheney in Washington.

He said that during his tenure as finance minister, the economic coordinator to the region assisted in Israel’s economic recovery during the early 1980s.

Chief Palestinian negotiator Saeb Erekat said in response "We welcome this appointment of James Wolfensohn, who in his work with the World Bank here, extended help to the Palestinians. He is a very respectable, decent and dignified man and he is welcomed here."

U.S. President George W. Bush has embraced Israeli Prime Minister Ariel Sharon's disengagement plan, which calls for evacuating all 21 settlements in Gaza and four of 120 in the West Bank.

Demands for greater political and economic accountability

Sharon had originally envisaged a unilateral withdrawal step but relented after moderate PA Chairman Mahmoud Abbas was elected in January to succeed the late Yasser Arafat.

Bush said Israel's successful withdrawal from Gaza is an essential step toward reviving negotiations on the quartet-backed "road map" for peace.

The Wolfensohn announcement follows Washington's appointment of Army Lt. Gen. William Ward to help the Palestinians reorganize their competing security services and to promote security cooperation with Israel.

Proponents said it could be helpful to have a point-person on civil issues as Abbas seeks to reform the Palestinian Authority, long accused of corruption, and as Washington increases its economic aid to the Palestinians.

In his State of the Union address, Bush pledged USD 350 million in aid to the Palestinians, but key U.S. lawmakers have demanded greater political and economic accountability before providing the money directly to the Palestinian Authority.