Aug. 12 (Bloomberg) -- Wide gaps remain between Israel and the Palestinians in reaching a long-term deal on the Gaza Strip, an Israeli official said, as Hamas warned there would be no more truces beyond the one due to end midnight tomorrow.
No progress has been made in the Cairo talks that resumed yesterday, according to the Israeli official, who wasn’t authorized to comment on the record. Israeli Prime Minister Benjamin Netanyahu canceled a meeting of top ministers scheduled today to discuss the negotiations, while Defense Minister Moshe Ya’alon told the armed forces to prepare for renewed fighting when the cease-fire ends tomorrow night.
“On Wednesday at midnight I don’t know if we will have come to an arrangement,” Ya’alon said at a Navy base in remarks broadcast on Channel 2 television. “It’s possible that firing will break out again and we will fire on them and carry out operations and they will attack at sea or elsewhere,” he said.
Even with negotiations stalled, Israel and Gaza militant groups have maintained the three-day truce that began yesterday, with no reports of rockets fired from Gaza or Israeli air strikes. The cease-fire, the second over the past week, is intended to give both sides time to resolve longstanding issues.
“The first cease-fire passed with no progress, and this is the second and final cease-fire,” Hamas official Musa Abu Marzouk said in a post today on his Facebook page. “What’s needed now is for the Palestinian delegation to achieve the desires of its people.” He didn’t say whether that meant Hamas would let the truce expire without seeking a new one.
The official Voice of Palestine radio station said Israel’s demand to demilitarize Hamas-ruled Gaza isn’t on the talks’ agenda.
The shekel today fell 0.7 percent to 3.489 to the dollar, its lowest since May 28. The benchmark TA-25 stock index, which has remained largely unaffected by the conflict, dropped 0.2 percent today. Israel’s five-year credit default swaps rose last week to the highest since January.
Israel wants Gaza disarmed while Hamas is pressing to end a blockade that Israel imposed in 2006, citing security reasons, with support from Egypt. More than 1,900 Palestinians, including hundreds of civilians, have been killed in the monthlong conflict, according to Gaza health officials, and 67 people have died on the Israeli side.
The United Nations has estimated it will take $6 billion to repair the damage the fighting has wrought in Gaza, where 10,000 homes have been rendered uninhabitable by Israeli strikes. Schools, medical centers, mosques, a power station and water and sewage facilities were also hit.
Israel opened its military campaign in Gaza on July 8 with the stated aims of quashing rocket fire and destroying dozens of infiltration tunnels militants built to carry out cross-border raids. It says armed men account for 750 to 1,000 of the Palestinian dead and accuses Hamas of deliberately putting civilians in danger by operating within built-up areas and in and around schools, hospitals and mosques. The U.S. and the European Union classify Hamas as a terrorist group.
Deputy Bank of Israel Governor Nadine Baudot-Trajtenberg told Army Radio today that the Lebanon war in the summer of 2006, which lasted a similar amount of time, cost the Israeli economy about half a percentage point in growth. Some of the current wartime expenses may need to be rolled over to the 2015 budget, which was already headed for a bigger deficit than planned, she said.
In handling that gap, “what’s important is that we don’t lose credibility,” Baudot-Trajtenberg said. Part of the Israeli economy’s strength in recent years “derived from economic and financial stability,” she said.
Israel’s Central Bureau of Statistics said yesterday that tourism was down 21 percent in July from a year earlier as a result of the fighting. The government’s July budget deficit quadrupled from a year earlier, in part because of the deferral of taxes to residents of Israel’s rocket-battered south and because of early payments to vendors in the area, the Finance Ministry said.
The UN Human Rights Council yesterday announced the formation of a panel of inquiry for the Gaza conflict, naming William Schabas of Canada, an international law professor at Middlesex University in London, as chairman.
Israel’s Foreign Ministry called the commission a “kangaroo court” and said it “proves without a doubt that Israel can’t expect justice from a body like this.” Israel didn’t cooperate with a UN inquiry into its 2008-9 war in Gaza and hasn’t said whether it will deliver testimony to the new panel.
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