Agreement on the Gaza Strip and the Jericho Area: Palestinian Authority, international presence, Paris Protocol

Letter dated 27 May 1994 from the Permanent Representatives

of the Russian Federation and the United States of America

to the United Nations addressed to the Secretary-General

As co-sponsors of the peace process launched at Madrid in October 1991 and witnesses to the signing at Cairo on 4 May 1994 of the Agreement on the Gaza Strip and the Jericho Area, including its annexes and maps, and an exchange of letters by the Government of the State of Israel and the Palestine Liberation Organization, the representative of the Palestinian people, we have the honour to enclose the above document (see annex).

We would be grateful if you would have the present letter, the attached Agreement, including its annexes and maps, and the exchange of letters distributed as an official document of the General Assembly, under item 38 of the preliminary list, and of the Security Council.

(Signed)  Yuliy M. VORONTSOV  

Ambassador   

Permanent Representative

to the United Nations of the

Russian Federation

(Signed)  Madeleine K. ALBRIGHT

Ambassador   

Permanent Representative

to the United Nations of the

United States of Americ

                       

* A/49/50/Rev.1.


Letter dated 27 May 1994 from the Permanent Representative

of Israel to the United Nations addressed to the Secretary-General

Following my letter to you of 8 October 1993, concerning the Declaration of Principles on Interim Self-Government Arrangements, signed on 13 September 1993 at Washington, D.C. (see A/48/486-S/26560), I have the honour to enclose the Agreement on the Gaza Strip and the Jericho Area, including its annexes and maps, signed on 4 May 1994 at Cairo, as well as the exchange of letters signed on the same day by the Government of the State of Israel and the Palestine Liberation Organization, the representative of the Palestinian people, and witnessed by the United States of America, the Russian Federation and the Arab Republic of Egypt (see annex).

I would be grateful if you would have the present letter, the attached Agreement, including its annexes and maps, and the exchange of letters distributed as an official document of the General Assembly, under item 38 of the preliminary list, and of the Security Council.

(Signed)  Gad YAACOBI

Ambassador

Permanent Representative of Israel

to the United Nations


Letter dated 27 May 1994 from the Permanent Observer

of Palestine to the United Nations addressed to the Secretary-General

Following my letter to you of 8 October 1993, concerning the Declaration of Principles on Interim Self-Government Arrangements, signed on 13 September 1993 at Washington, D.C. (see A/48/486-S/26560), I have the honour to enclose the Agreement on the Gaza Strip and the Jericho Area, including its annexes and maps, signed on 4 May 1994 at Cairo, as well as the exchange of letters signed on the same day by the Government of the State of Israel and the Palestine Liberation Organization, the representative of the Palestinian people, and witnessed by the United States of America, the Russian Federation and the Arab Republic of Egypt (see annex).

I would be grateful if you would have the present letter, the attached Agreement, including its annexes and maps, and the exchange of letters distributed as an official document of the General Assembly, under item 38 of the preliminary list, and of the Security Council.

(Signed)  Dr. Nasser AL-KIDWA      

Permanent Observer of Palestine

to the United Nations     


ANNEX*

AGREEMENT ON THE GAZA STRIP AND THE JERICHO AREA

Cairo, 4 May 1994

                        

* The present annex is being published as received, without formal editing.


            AGREEMENT ON THE GAZA STRIP AND THE JERICHO AREA

The Government of the State of Israel and the Palestine Liberation
Organization (hereinafter "the PLO"), the representative of the
Palestinian people;

                                PREAMBLE

WITHIN        the framework of the Middle East peace process initiated
              at Madrid in October 1991;

REAFFIRMING   their determination to live in peaceful coexistence,
              mutual dignity and security, while recognizing their
              mutual legitimate and political rights;

REAFFIRMING   their desire to achieve a just, lasting and comprehensive
              peace settlement through the agreed political process;

REAFFIRMING   their adherence to the mutual recognition and commitments
              expressed in the letters dated September 9, 1993, signed
              by and exchanged between the Prime Minister of Israel and
              the Chairman of the PLO;

REAFFIRMING   their understanding that the interim self-government
              arrangements, including the arrangements to apply in the
              Gaza Strip and the Jericho Area contained in this
              Agreement, are an integral part of the whole peace process
              and that the negotiations on the permanent status will
              lead to the implementation of Security Council Resolutions
              242 and 338;

DESIROUS      of putting into effect the Declaration of Principles on
              Interim Self-Government Arrangements signed at Washington,
              D.C. on September 13, 1993, and the Agreed Minutes thereto
              (hereinafter "the Declaration of Principles"), and in
              particular the Protocol on withdrawal of Israeli forces
              from the Gaza Strip and the Jericho Area;

HEREBY AGREE  to the following arrangements regarding the Gaza Strip and
              the Jericho Area:

                               Article I

                              Definitions

For the purpose of this Agreement:

    a.  the Gaza Strip and the Jericho Area are delineated on map Nos. 1
        and 2 attached to this Agreement;

    b.  "the Settlements" means the Gush Katif and Erez settlement
        areas, as well as the other settlements in the Gaza Strip, as
        shown on attached map No. 1;

    c.  "the Military Installation Area" means the Israeli military
        installation area along the Egyptian border in the Gaza Strip,
        as shown on map No. 1; and

    d.  the term "Israelis" shall also include Israeli statutory
        agencies and corporations registered in Israel.

                               Article II

            Scheduled Withdrawal of Israeli Military Forces

1.  Israel shall implement an accelerated and scheduled withdrawal of
    Israeli military forces from the Gaza Strip and from the Jericho
    Area to begin immediately with the signing of this Agreement. Israel
    shall complete such withdrawal within three weeks from this date.

2.  Subject to the arrangements included in the Protocol Concerning
    Withdrawal of Israeli Military Forces and Security Arrangements
    attached as Annex I, the Israeli withdrawal shall include evacuating
    all military bases and other fixed installations to be handed over
    to the Palestinian Police, to be established pursuant to Article IX
    below (hereinafter "the Palestinian Police").

3.  In order to carry out Israel's responsibility for external security
    and for internal security and public order of Settlements and
    Israelis, Israel shall, concurrently with the withdrawal, redeploy
    its remaining military forces to the Settlements and the Military
    Installation Area, in accordance with the provisions of this
    Agreement. Subject to the provisions of this Agreement, this
    redeployment shall constitute full implementation of Article XIII of
    the Declaration of Principles with regard to the Gaza Strip and the
    Jericho Area only.

4.  For the purposes of this Agreement, "Israeli military forces" may
    include Israel police and other Israeli security forces.

5.  Israelis, including Israeli military forces, may continue to use
    roads freely within the Gaza Strip and the Jericho Area.
    Palestinians may use public roads crossing the Settlements freely,
    as provided for in Annex I.

6.  The Palestinian Police shall be deployed and shall assume
    responsibility for public order and internal security of
    Palestinians in accordance with this Agreement and Annex I.

                              Article III

                         Transfer of Authority

1.  Israel shall transfer authority as specified in this Agreement from
    the Israeli military government and its Civil Administration to the
    Palestinian Authority, hereby established, in accordance with
    Article V of this Agreement, except for the authority that Israel
    shall continue to exercise as specified in this Agreement.

2.  As regards the transfer and assumption of authority in civil
    spheres, powers and responsibilities shall be transferred and
    assumed as set out in the Protocol Concerning Civil Affairs attached
    as Annex II.

3.  Arrangements for a smooth and peaceful transfer of the agreed powers
    and responsibilities are set out in Annex II.

4.  Upon the completion of the Israeli withdrawal and the transfer of
    powers and responsibilities as detailed in paragraphs 1 and 2 above
    and in Annex II, the Civil Administration in the Gaza Strip and the
    Jericho Area will be dissolved and the Israeli military government
    will be withdrawn. The withdrawal of the military government shall
    not prevent it from continuing to exercise the powers and
    responsibilities specified in this Agreement.

5.  A Joint Civil Affairs Coordination and Cooperation Committee
    (hereinafter "the CAC") and two Joint Regional Civil Affairs
    Subcommittees for the Gaza Strip and the Jericho Area respectively
    shall be established in order to provide for coordination and
    cooperation in civil affairs between the Palestinian Authority and
    Israel, as detailed in Annex II.

6.  The offices of the Palestinian Authority shall be located in the
    Gaza Strip and the Jericho Area pending the inauguration of the
    Council to be elected pursuant to the Declaration of Principles.

                               Article IV

         Structure and Composition of the Palestinian Authority

1.  The Palestinian Authority will consist of one body of 24 members
    which shall carry out and be responsible for all the legislative and
    executive powers and responsibilities transferred to it under this
    Agreement, in accordance with this Article, and shall be responsible
    for the exercise of judicial functions in accordance with Article
    VI, subparagraph 1.b. of this Agreement.

2.  The Palestinian Authority shall administer the departments
    transferred to it and may establish, within its jurisdiction, other
    departments and subordinate administrative units as necessary for
    the fulfillment of its responsibilities. It shall determine its own
    internal procedures.

3.  The PLO shall inform the Government of Israel of the names of the
    members of the Palestinian Authority and any change of members.
    Changes in the membership of the Palestinian Authority will take
    effect upon an exchange of letters between the PLO and the
    Government of Israel.

4.  Each member of the Palestinian Authority shall enter into office
    upon undertaking to act in accordance with this Agreement.

                               Article V

                              Jurisdiction

1.  The authority of the Palestinian Authority encompasses all matters
    that fall within its territorial, functional and personal
    jurisdiction, as follows:

    a.  The territorial jurisdiction covers the Gaza Strip and the
        Jericho Area territory, as defined in Article I, except for
        Settlements and the Military Installation Area.

        Territorial jurisdiction shall include land, subsoil and
        territorial waters, in accordance with the provisions of this
        Agreement.

    b.  The functional jurisdiction encompasses all powers and
        responsibilities as specified in this Agreement. This
        jurisdiction does not include foreign relations, internal
        security and public order of Settlements and the Military
        Installation Area and Israelis, and external security.

    c.  The personal jurisdiction extends to all persons within the
        territorial jurisdiction referred to above, except for Israelis,
        unless otherwise provided in this Agreement.

2.  The Palestinian Authority has, within its authority, legislative,
    executive and judicial powers and responsibilities, as provided for
    in this Agreement.

3.  a.  Israel has authority over the Settlements, the Military
        Installation Area, Israelis, external security, internal
        security and public order of Settlements, the Military
        Installation Area and Israelis, and those agreed powers and
        responsibilities specified in this Agreement.

    b.  Israel shall exercise its authority through its military
        government, which, for that end, shall continue to have the
        necessary legislative, judicial and executive powers and
        responsibilities, in accordance with international law. This
        provision shall not derogate from Israel's applicable
        legislation over Israelis in personam. 4. The exercise of
        authority with regard to the electromagnetic sphere and airspace
        shall be in accordance with the provisions of this Agreement.

5.  The provisions of this Article are subject to the specific legal
    arrangements detailed in the Protocol Concerning Legal Matters
    attached as Annex III. Israel and the Palestinian Authority may
    negotiate further legal arrangements.

6.  Israel and the Palestinian Authority shall cooperate on matters of
    legal assistance in criminal and civil matters through the legal
    subcommittee of the CAC.

                               Article VI

        Powers and Responsibilities of the Palestinian Authority

1.  Subject to the provisions of this Agreement, the Palestinian
    Authority, within its jurisdiction:

    a.  has legislative powers as set out in Article VII of this
        Agreement, as well as executive powers;

    b.  will administer justice through an independent judiciary;

    c.  will have, inter alia, power to formulate policies, supervise
        their implementation, employ staff, establish departments,
        authorities and institutions, sue and be sued and conclude
        contracts; and

    d.  will have, inter alia, the power to keep and administer
        registers and records of the population, and issue certificates,
        licenses and documents.

2.  a.  In accordance with the Declaration of Principles, the
        Palestinian Authority will not have powers and responsibilities
        in the sphere of foreign relations, which sphere includes the
        establishment abroad of embassies, consulates or other types of
        foreign missions and posts or permitting their establishment in
        the Gaza Strip or the Jericho Area, the appointment of or
        admission of diplomatic and consular staff, and the exercise of
        diplomatic functions.

    b.  Notwithstanding the provisions of this paragraph, the PLO may
        conduct negotiations and sign agreements with states or
        international organizations for the benefit of the Palestinian
        Authority in the following cases only:

        (1) economic agreements, as specifically provided in Annex IV of
            this Agreement;

        (2) agreements with donor countries for the purpose of
            implementing arrangements for the provision of assistance to
            the Palestinian Authority;

        (3) agreements for the purpose of implementing the regional
            development plans detailed in Annex IV of the Declaration of
            Principles or in agreements entered into in the framework of
            the multilateral negotiations; and

        (4) cultural, scientific and educational agreements.

    c.  Dealings between the Palestinian Authority and representatives
        of foreign states and international organizations, as well as
        the establishment in the Gaza Strip and the Jericho Area of
        representative offices other than those described in
        subparagraph 2.a. above, for the purpose of implementing the
        agreements referred to in subparagraph 2.b. above, shall not be
        considered foreign relations.

                              Article VII

            Legislative Powers of the Palestinian Authority

1.  The Palestinian Authority will have the power, within its
    jurisdiction, to promulgate legislation, including basic laws, laws,
    regulations and other legislative acts.

2.  Legislation promulgated by the Palestinian Authority shall be
    consistent with the provisions of this Agreement.

3.  Legislation promulgated by the Palestinian Authority shall be
    communicated to a legislation subcommittee to be established by the
    CAC (hereinafter "the Legislation Subcommittee"). During a period of
    30 days from the communication of the legislation, Israel may
    request that the Legislation Subcommittee decide whether such
    legislation exceeds the jurisdiction of the Palestinian Authority or
    is otherwise inconsistent with the provisions of this Agreement.

4.  Upon receipt of the Israeli request, the Legislation Subcommittee
    shall decide, as an initial matter, on the entry into force of the
    legislation pending its decision on the merits of the matter.

5.  If the Legislation Subcommittee is unable to reach a decision with
    regard to the entry into force of the legislation within 15 days,
    this issue will be referred to a board of review. This board of
    review shall be comprised of two judges, retired judges or senior
    jurists (hereinafter "Judges"), one from each side, to be appointed
    from a compiled list of three Judges proposed by each.

    In order to expedite the proceedings before this board of review,
    the two most senior Judges, one from each side, shall develop
    written informal rules of procedure.

6.  Legislation referred to the board of review shall enter into force
    only if the board of review decides that it does not deal with a
    security issue which falls under Israel's responsibility, that it
    does not seriously threaten other significant Israeli interests
    protected by this Agreement and that the entry into force of the
    legislation could not cause irreparable damage or harm.

7.  The Legislation Subcommittee shall attempt to reach a decision on
    the merits of the matter within 30 days from the date of the Israeli
    request. If this Subcommittee is unable to reach such a decision
    within this period of 30 days, the matter shall be referred to the
    Joint Israeli-Palestinian Liaison Committee referred to in Article
    XV below (hereinafter "the Liaison Committee"). This Liaison
    Committee will deal with the matter immediately and will attempt to
    settle it within 30 days.

8.  Where the legislation has not entered into force pursuant to
    paragraphs 5 or 7 above, this situation shall be maintained pending
    the decision of the Liaison Committee on the merits of the matter,
    unless it has decided otherwise.

9.  Laws and military orders in effect in the Gaza Strip or the Jericho
    Area prior to the signing of this Agreement shall remain in force,
    unless amended or abrogated in accordance with this Agreement.

                              Article VIII

               Arrangements for Security and Public Order

1.  In order to guarantee public order and internal security for the
    Palestinians of the Gaza Strip and the Jericho Area, the Palestinian
    Authority shall establish a strong police force, as set out in
    Article IX below. Israel shall continue to carry the responsibility
    for defense against external threats, including the responsibility
    for protecting the Egyptian border and the Jordanian line, and for
    defense against external threats from the sea and from the air, as
    well as the responsibility for overall security of Israelis and
    Settlements, for the purpose of safeguarding their internal security
    and public order, and will have all the powers to take the steps
    necessary to meet this responsibility.

2.  Agreed security arrangements and coordination mechanisms are
    specified in Annex I.

3.  A joint Coordination and Cooperation Committee for mutual security
    purposes (hereinafter "the JSC"), as well as three joint District
    Coordination and Cooperation Offices for the Gaza district, the Khan
    Yunis district and the Jericho district respectively (hereinafter
    "the DCOs") are hereby established as provided for in Annex I.

4.  The security arrangements provided for in this Agreement and in
    Annex I may be reviewed at the request of either Party and may be
    amended by mutual agreement of the Parties. Specific review
    arrangements are included in Annex I.

                               Article IX

              The Palestinian Directorate of Police Force

1.  The Palestinian Authority shall establish a strong police force, the
    Palestinian Directorate of Police Force (hereinafter "the
    Palestinian Police"). The duties, functions, structure, deployment
    and composition of the Palestinian Police, together with provisions
    regarding its equipment and operation, are set out in Annex I,
    Article III. Rules of conduct governing the activities of the
    Palestinian Police are set out in Annex I, Article VIII.

2.  Except for the Palestinian Police referred to in this Article and
    the Israeli military forces, no other armed forces shall be
    established or operate in the Gaza Strip or the Jericho Area.

3.  Except for the arms, ammunition and equipment of the Palestinian
    Police described in Annex I, Article III, and those of the Israeli
    military forces, no organization or individual in the Gaza Strip and
    the Jericho Area shall manufacture, sell, acquire, possess, import
    or otherwise introduce into the Gaza Strip or the Jericho Area any
    firearms, ammunition, weapons, explosives, gunpowder or any related
    equipment, unless otherwise provided for in Annex I.

                               Article X

                                Passages

Arrangements for coordination between Israel and the Palestinian
Authority regarding the Gaza-Egypt and Jericho-Jordan passages, as well
as any other agreed international crossings, are set out in Annex I,
Article X.

                               Article XI

        Safe Passage between the Gaza Strip and the Jericho Area

Arrangements for safe passage of persons and transportation between the
Gaza Strip and the Jericho Area are set out in Annex I, Article IX.

                              Article XII

         Relations Between Israel and the Palestinian Authority

1.  Israel and the Palestinian Authority shall seek to foster mutual
    understanding and tolerance and shall accordingly abstain from
    incitement, including hostile propaganda, against each other and,
    without derogating from the principle of freedom of expression,
    shall take legal measures to prevent such incitement by any
    organizations, groups or individuals within their jurisdiction.

2.  Without derogating from the other provisions of this Agreement,
    Israel and the Palestinian Authority shall cooperate in combatting
    criminal activity which may affect both sides, including offenses
    related to trafficking in illegal drugs and psychotropic substances,
    smuggling, and offenses against property, including offenses related
    to vehicles.

                              Article XIII

                           Economic Relations

The economic relations between the two sides are set out in the Protocol
on Economic Relations signed in Paris on April 29, 1994 and the
Appendices thereto, certified copies of which are attached as Annex IV,
and will be governed by the relevant provisions of this Agreement and
its Annexes.

                              Article XIV

                    Human Rights and the Rule of Law

Israel and the Palestinian Authority shall exercise their powers and
responsibilities pursuant to this Agreement with due regard to
internationally-accepted norms and principles of human rights and the
rule of law.

                               Article XV

            The Joint Israeli-Palestinian Liaison Committee

1.  The Liaison Committee established pursuant to Article X of the
    Declaration of Principles shall ensure the smooth implementation of
    this Agreement. It shall deal with issues requiring coordination,
    other issues of common interest and disputes.

2.  The Liaison Committee shall be composed of an equal number of
    members from each Party. It may add other technicians and experts as
    necessary.

3.  The Liaison Committee shall adopt its rules of procedure, including
    the frequency and place or places of its meetings.

4.  The Liaison Committee shall reach its decisions by Agreement.

                              Article XVI

             Liaison and Cooperation with Jordan and Egypt

1.  Pursuant to Article XII of the Declaration of Principles, the two
    Parties shall invite the Governments of Jordan and Egypt to
    participate in establishing further liaison and cooperation
    arrangements between the Government of Israel and the Palestinian
    representatives on the one hand, and the Governments of Jordan and
    Egypt on the other hand, to promote cooperation between them. These
    arrangements shall include the constitution of a Continuing
    Committee.

2.  The Continuing Committee shall decide by agreement on the modalities
    of admission of persons displaced from the West Bank and the Gaza
    Strip in 1967, together with necessary measures to prevent
    disruption and disorder.

3.  The Continuing Committee shall deal with other matters of common
    concern.

                              Article XVII

                 Settlement of Differences and Disputes

Any difference relating to the application of this Agreement shall be
referred to the appropriate coordination and cooperation mechanism
established under this Agreement. The provisions of Article XV of the
Declaration of Principles shall apply to any such difference which is
not settled through the appropriate coordination and cooperation
mechanism, namely:

1.  Disputes arising out of the application or interpretation of this
    Agreement or any subsequent agreements pertaining to the interim
    period shall be settled by negotiations through the Liaison
    Committee.

2.  Disputes which cannot be settled by negotiations may be settled by a
    mechanism of conciliation to be agreed between the Parties.

3.  The Parties may agree to submit to arbitration disputes relating to
    the interim period, which cannot be settled through conciliation. To
    this end, upon the agreement of both Parties, the Parties will
    establish an Arbitration Committee.

                             Article XVIII

                       Prevention of Hostile Acts

Both sides shall take all measures necessary in order to prevent acts of
terrorism, crime and hostilities directed against each other, against
individuals falling under the other's authority and against their
property, and shall take legal measures against offenders. In addition,
the Palestinian side shall take all measures necessary to prevent such
hostile acts directed against the Settlements, the infrastructure
serving them and the Military Installation Area, and the Israeli side
shall take all measures necessary to prevent such hostile acts emanating
from the Settlements and directed against Palestinians.

                              Article XIX

                            Missing Persons

The Palestinian Authority shall cooperate with Israel by providing all
necessary assistance in the conduct of searches by Israel within the
Gaza Strip and the Jericho Area for missing Israelis, as well as by
providing information about missing Israelis. Israel shall cooperate
with the Palestinian Authority in searching for, and providing necessary
information about, missing Palestinians.

                               Article XX

                      Confidence Building Measures

With a view to creating a positive and supportive public atmosphere to
accompany the implementation of this Agreement, and to establish a solid
basis of mutual trust and good faith, both Parties agree to carry out
confidence building measures as detailed herewith:

1.  Upon the signing of this Agreement, Israel will release, or turn
    over, to the Palestinian Authority within a period of 5 weeks, about
    5,000 Palestinian detainees and prisoners, residents of the West
    Bank and the Gaza Strip. Those released will be free to return to
    their homes anywhere in the West Bank or the Gaza Strip. Prisoners
    turned over to the Palestinian Authority shall be obliged to remain
    in the Gaza Strip or the Jericho Area for the remainder of their
    sentence.

2.  After the signing of this Agreement, the two Parties shall continue
    to negotiate the release of additional Palestinian prisoners and
    detainees, building on agreed principles.

3.  The implementation of the above measures will be subject to the
    fulfillment of the procedures determined by Israeli law for the
    release and transfer of detainees and prisoners.

4.  With the assumption of Palestinian authority, the Palestinian side
    commits itself to solving the problem of those Palestinians who were
    in contact with the Israeli authorities. Until an agreed solution is
    found, the Palestinian side undertakes not to prosecute these
    Palestinians or to harm them in any way.

5.  Palestinians from abroad whose entry into the Gaza Strip and the
    Jericho Area is approved pursuant to this Agreement, and to whom the
    provisions of this Article are applicable, will not be prosecuted
    for offenses committed prior to September 13, 1993.

                              Article XXI

                    Temporary International Presence

1.  The Parties agree to a temporary international or foreign presence
    in the Gaza Strip and the Jericho Area (hereinafter "the TIP"), in
    accordance with the provisions of this Article.

2.  The TIP shall consist of 400 qualified personnel, including
    observers, instructors and other experts, from 5 or 6 of the donor
    countries.

3.  The two Parties shall request the donor countries to establish a
    special fund to provide finance for the TIP.

4.  The TIP will function for a period of 6 months. The TIP may extend
    this period, or change the scope of its operation, with the
    agreement of the two Parties.

5.  The TIP shall be stationed and operate within the following cities
    and villages: Gaza, Khan Yunis, Rafah, Deir El Ballah, Jabaliya,
    Absan, Beit Hanun and Jericho.

6.  Israel and the Palestinian Authority shall agree on a special
    Protocol to implement this Article, with the goal of concluding
    negotiations with the donor countries contributing personnel within
    two months.

                              Article XXII

                  Rights, Liabilities and Obligations

1.  a.  The transfer of all powers and responsibilities to the
        Palestinian Authority, as detailed in Annex II, includes all
        related rights, liabilities and obligations arising with regard
        to acts or omissions which occurred prior to the transfer.
        Israel will cease to bear any financial responsibility regarding
        such acts or omissions and the Palestinian Authority will bear
        all financial responsibility for these and for its own
        functioning.

    b.  Any financial claim made in this regard against Israel will be
        referred to the Palestinian Authority.

    c.  Israel shall provide the Palestinian Authority with the
        information it has regarding pending and anticipated claims
        brought before any court or tribunal against Israel in this
        regard.

    d.  Where legal proceedings are brought in respect of such a claim,
        Israel will notify the Palestinian Authority and enable it to
        participate in defending the claim and raise any arguments on
        its behalf.

    e.  In the event that an award is made against Israel by any court
        or tribunal in respect of such a claim, the Palestinian
        Authority shall reimburse Israel the full amount of the award.

    f.  Without prejudice to the above, where a court or tribunal
        hearing such a claim finds that liability rests solely with an
        employee or agent who acted beyond the scope of the powers
        assigned to him or her, unlawfully or with willful malfeasance,
        the Palestinian Authority shall not bear financial
        responsibility.

2.  The transfer of authority in itself shall not affect rights,

    liabilities and obligations of any person or legal entity, in
    existence at the date of signing of this Agreement.

                              Article XXIII

                              Final Clauses

1.  This Agreement shall enter into force on the date of its signing.

2.  The arrangements established by this Agreement shall remain in force
    until and to the extent superseded by the Interim Agreement referred
    to in the Declaration of Principles or any other agreement between
    the Parties.

3.  The five-year interim period referred to in the Declaration of
    Principles commences on the date of the signing of this Agreement.

4.  The Parties agree that, as long as this Agreement is in force, the
    security fence erected by Israel around the Gaza Strip shall remain
    in place and that the line demarcated by the fence, as shown on
    attached map No. 1, shall be authoritative only for the purpose of
    this Agreement.

5.  Nothing in this Agreement shall prejudice or preempt the outcome of
    the negotiations on the interim agreement or on the permanent status
    to be conducted pursuant to the Declaration of Principles. Neither

    Party shall be deemed, by virtue of having entered into this
    Agreement, to have renounced or waived any of its existing rights,

    claims or positions.

6.  The two Parties view the West Bank and the Gaza Strip as a single
    territorial unit, the integrity of which will be preserved during
    the interim period.

7.  The Gaza Strip and the Jericho Area shall continue to be an integral
    part of the West Bank and the Gaza Strip, and their status shall not
    be changed for the period of this Agreement. Nothing in this
    Agreement shall be considered to change this status.

8.  The Preamble to this Agreement, and all Annexes, Appendices and maps
    attached hereto, shall constitute an integral part hereof.

Done in Cairo this fourth day of May, 1994.

         __________________________

         For the Government of the            
             State of Israel

________________

For the PLO

Witnessed By:

        ___________________________

       The United States of America            

         ____________________________      

           The Russian Federation

                                 __________________________

                                 The Arab Republic of Egypt


ANNEX I

Protocol Concerning Withdrawal of
Israeli Military Forces and Security Arrangements

                               Article I

         Arrangements for Withdrawal of Israeli Military Forces

1.  Subject to the provisions of this Annex, withdrawal of Israeli
    military forces from the Gaza Strip and from the Jericho Area shall
    begin on the date of the signing of this Agreement and shall be
    completed within three weeks (21 days) from that date.

2.  a.  The Joint Security Coordination and Cooperation Committee set up
        under Article II hereunder shall develop a plan to ensure full
        coordination between the Israeli military forces and the
        Palestinian Police during the withdrawal phases and the entry
        and deployment of the Palestinian Police.

    b.  This coordination will be implemented through the District
        Coordination Offices set up under Article II hereunder, that
        shall start functioning on the date of the signing of this
        Agreement.

    c.  The plan will include arrangements for the entry of the
        Palestinian Police, the introduction of police arms, ammunition
        and equipment and related matters, as well as arrangements
        intended to facilitate a smooth transfer of responsibility,
        including the transfer of civil authority, so that no vacuum in
        authority exists.

                               Article II

            Coordination and Cooperation In Security Matters

1.  Joint Security Coordination and Cooperation Committee

    a.  A joint Security Coordination and Cooperation Committee for
        Mutual Security Purposes (hereinafter "the JSC") is hereby
        established.

    b.  The JSC shall:

        (1) recommend security policy guidelines for the approval of the
            Joint Israeli- Palestinian Liaison Committee and implement
            such approved guidelines;

        (2) deal with security issues raised by either side;

        (3) provide the proper channel for exchanging information
            between the two sides, needed to solve security problems;
            and

        (4) provide directives for the District Coordination Offices.

    c.  The JSC shall comprise between five and seven members from each
        side. Decisions of the JSC will be reached by agreement between
        the two sides.

    d.  The JSC shall determine its rules of procedure. Meetings of the
        JSC shall be held every two weeks. In the event that either side
        requests a special meeting, it shall be convened within
        forty-eight (48) hours.

    e.  Unless otherwise agreed by the two sides, JSC meetings will be
        hosted by each of the sides alternately.

2.  District Coordination Offices

    a.  Three (3) District Coordination Offices are hereby established,
        one each for the districts of Gaza, Khan Yunis and Jericho
        (hereinafter "the DCOs").

    b.  The DCOs shall:

        (1) monitor and manage the matters requiring coordination as
            determined by the JSC, according to the policy and
            guidelines established by the JSC;

        (2) monitor and manage all matters of a joint nature within the
            specific district of each DCO, including the coordination of
            activities by one side which may affect the other side;

        (3) review, investigate and report to the JSC on the overall
            situation within the DCO's respective district, with special
            regard to specific events, incidents and activities
            occurring in the district;

        (4) direct the Joint Patrols and Joint Mobile Units as defined
            in this Article, operating within the DCO's respective
            district; and

        (5) direct the Liaison Bureau established under Article X below,
            operating at passages and crossing points as detailed in
            Article VII and X below, in conjunction with the Joint Civil
            Affairs Coordination and Cooperation Committee set up under
            Annex II to the Agreement (hereinafter the "CAC").

    c.  Each DCO will be continuously staffed by a team of up to six
        officers from each side, comprising one commander and five duty
        officers.

    d.  The DCOs will be operated jointly by both sides, 24 hours a day.
        At least one duty officer from each side will be present during
        each eight-hour shift, as well as the necessary number of
        assistants.

    e.  With a view to preventing friction and to enabling the two sides
        to deal with possible incidents, both sides shall ensure that
        the relevant DCO shall immediately be notified of any of the
        following events:

        (1) routine, scheduled or irregular activity or deployment by
            the Israeli military forces or the Palestinian Police that
            directly affect the other side. This includes activity or
            deployment in the proximity of Settlements or Palestinian
            villages, as the case may be;

        (2) events that pose a threat to public order;

        (3) activities which disturb the regular flow of traffic on the
            main roads, including roadblocks and road works;

        (4) incidents involving both Israelis and Palestinians, such as
            road accidents, rescue of casualties or persons in mortal
            danger, engagement steps or any incident in which a weapon
            is used;

        (5) a terrorist action of any kind and from any source;

        (6) infiltrations across the lines of the Gaza Strip and the
            Jericho Area; and

        (7) all cases in which Israelis are hospitalized in the Gaza
            Strip or the Jericho Area or in which Palestinians of the
            Gaza Strip or the Jericho Area are hospitalized in Israel.

    f.  Each DCO shall notify the relevant Israeli and Palestinian
        headquarters, as well as the Joint Patrols and Joint Mobile
        Units operating in the relevant district, of the occurrence of
        any of the events listed in subparagraph e. above.

    g.  The JSC may modify the content of the list of events outlined in
        subparagraph e. above.

    h.  Any event involving injury to Israelis, at any location within
        the Gaza Strip or the Jericho Area, shall be immediately
        reported to Israel through the relevant DCO. Israel may employ
        any means necessary for the evacuation and treatment of such
        injured persons, and will coordinate such activity through the
        relevant DCO.

    i.  The DCOs shall be equipped with the necessary means of
        communication to enable direct and immediate contact both with
        the Joint Patrols and the Joint Mobile Units, as well as with
        the respective district headquarters.

3.  Joint Patrols

    a.  The mission of the Joint Patrols is to ensure free, unimpeded
        and secure movement along the roads and in the areas described
        in Articles IV and V of this Annex.

    b.  Unless the JSC decides otherwise, the Joint Patrols shall each
        be composed of two 4-wheel drive vehicles, one Palestinian and
        one Israeli. The vehicles shall be marked so as to be easily
        distinguishable from all other vehicles in the area. There will
        be four persons in each vehicle: an officer, a signal operator,
        a driver and a guard.

    c.  The Joint Patrols will patrol 24 hours a day, in vehicles and on
        foot, along their routes of activity and on the adjacent sides
        of the roads upon which the security of traffic along these
        roads is dependent, or as directed by the DCO.

    d.  In roads under Israeli security responsibility, the Israeli
        vehicle will be the leading vehicle. In roads under Palestinian
        security responsibility, the Palestinian vehicle will be the
        leading vehicle. The Joint Patrol will be under the direction of
        the relevant DCO.

    e.  The Joint Patrols shall monitor continuously movement within
        their area of operation with a view to preventing incidents that
        may threaten or endanger persons using the roads. They shall
        report any such incident or threat thereof to the relevant DCO,
        and to the Israeli and Palestinian district headquarters.

    f.  On reaching the scene of an incident, the Joint Patrol will
        provide as much assistance as possible. Where the incident is
        dealt with by the authorities functioning in the area, the Joint
        Patrol shall verify that the appropriate measures have been
        taken and report to the relevant DCO accordingly.

    g.  Immediately upon becoming aware of the occurrence of one of the
        events listed in subparagraph 2.e above, the Joint Patrols shall
        report the event to the relevant DCO, as well as to the
        respective headquarters of the two sides.

4.  Joint Mobile Units

    a.  The mission of the Joint Mobile Units is to provide rapid
        response in the event of incidents and emergency situations, in
        order to ensure free, unimpeded and secure movement at the
        junctions where they are located, as well as along their
        designated routes of activity.

    b.  The composition of the Joint Mobile Units shall be similar to
        that of the Joint Patrols.

    c.  The duties of the Joint Mobile Units are:

        (1) to monitor movement along designated roads from stationary
            locations on agreed junctions, from where they may patrol at
            random on agreed roads as directed by the relevant DCO, in
            which case their duties shall be the same as those of Joint
            Patrols; and

        (2) in the event of an incident involving both Israelis and
            Palestinians, to reach the site of the incident in order to
            provide assistance and to investigate.

5.  Review of Security Arrangements

    The JSC shall meet six months after the signing of this Agreement,
    and at six-month intervals thereafter, to review the security
    arrangements and to recommend changes. Amendments will be adopted by
    mutual agreement based, among other factors, on the regular reports
    and recommendations received from the DCOs.

                              Article III

              The Palestinian Directorate of Police Force

1.  General

    The Palestinian Directorate of Police Force (hereinafter "the
    Palestinian Police") shall function in accordance with the following
    principles:

    a.  It will be responsible for public order and internal security
        within the jurisdiction of the Palestinian Authority in
        accordance with Article V of the Agreement.

    b.  Movement of Palestinian policemen between the Gaza Strip and the
        Jericho Area will be conducted in accordance with Article IX of
        this Annex.

2.  Duties and Functions

    a.  Subject to the provisions of this Agreement, in the areas under
        Palestinian jurisdiction the duties of the Palestinian Police
        shall be as follows:

        (1) performing normal police functions, including maintaining
            internal security and public order;

        (2) protecting the public and its property and acting to provide
            a feeling of security and safety;

        (3) adopting all measures necessary for preventing crime in
            accordance with the law; and

        (4) protecting public installations and places of special
            importance.

3.  Structure and Composition

    a.  The Palestinian Police shall consist of one integral unit under
        the control of the Palestinian Authority. It shall be composed
        of four branches:

        (1) Civil Police (Al Shurta);

        (2) Public Security;

        (3) Intelligence; and

        (4) Emergency Services and Rescue (Al Difa'a Al Madani).

        In each district, all members of the four Police branches shall
        be subordinate to one central command.

    b.  The Palestinian Police will establish a Palestinian Coastal
        Police unit (hereinafter the "Palestinian Coastal Police") in
        accordance with Article XI of this Annex.

    c.  The Palestinian Police will be comprised of up to 9,000
        policemen in all its branches.

4.  Recruitment

    a.  The Palestinian Police shall consist of policemen recruited
        locally, and from abroad (from among individuals holding
        Jordanian passports or Palestinian documents issued by Egypt).
        The number of Palestinian recruits from abroad shall not exceed
        7,000, of whom 1,000 will arrive three months after the signing
        of the Agreement.

    b.  Palestinians recruited from abroad should be trained as
        policemen. The employment of policemen who have been convicted
        of serious crimes or have been found to be actively involved in
        terrorist activities subsequent to their employment will be
        immediately terminated. The list of Palestinians recruited,
        whether locally or from abroad, shall be agreed on by both
        sides.

    c.  Palestinian policemen coming from abroad may be accompanied by
        spouse and children.

5.  Arms, Ammunition and Equipment

    a.  Uniformed policemen, as well as other policemen on duty who hold
        special accreditation, may carry arms.

    b.  The Palestinian Police will possess the following arms and
        equipment:

        (1) 7,000 light personal weapons.

        (2) Up to 120 machine guns of 0.3" or 0.5" caliber.

        (3) Up to 45 wheeled armored vehicles of a type to be agreed on
            between the two sides, and of which 22 will be deployed in
            protecting Palestinian Authority installations. The use of
            wheeled armored vehicles in the Security Perimeter, on the
            Lateral Roads and on their adjacent sides, or in the
            vicinity of the Settlements shall be approved through the
            relevant DCO. Movement of such vehicles along the central
            North-South road (Road No. 4) in the Gaza Strip may take
            place only after providing notification to the relevant DCO.

        (4) Communication systems, subject to Article II of Annex II of
            this Agreement.

        (5) Distinctive uniforms, identification badges and vehicle
            markings.

    c.  Relevant police equipment and infrastructure funded from the
        budget of the Civil Administration shall be transferred to the
        Palestinian Police.

6.  Introduction of Arms and Equipment and Foreign Assistance

    a.  All foreign contributions and other forms of assistance to the
        Palestinian Police must comply with the provisions of this
        Agreement.

    b.  The introduction into the Gaza Strip or the Jericho Area of
        arms, ammunition or equipment for the Palestinian Police, from
        all sources, shall be coordinated through the JSC.

7.  Deployment

    The Palestinian Police shall be initially deployed in the Gaza Strip
    and the Jericho Area as shown on attached maps Nos. 4 and 5. Any
    changes to this deployment will be agreed on in the JSC.

                               Article IV

                Security Arrangements in the Gaza Strip

1.  The Delimiting Line

    For the purpose of the present Agreement only, and without prejudice
    to the final status, the line delimiting the northern and eastern
    edge of the Gaza Strip follows the fence on the ground, as
    delineated on attached map No. 1 by an unbroken green line
    (hereinafter "the Delimiting Line") and shall have no other effect.

2.  Security Perimeter

    a)  There will be a security perimeter along the Delimiting Line
        inside the Gaza Strip as delineated on attached map No. 1 by a
        broken green line (hereinafter "the Security Perimeter").

    b)  In accordance with the provisions of this Agreement, the
        Palestinian Police will be responsible for security in the
        Security Perimeter.

    c)  The Palestinian Police will enforce special security measures
        aimed at preventing infiltrations across the Delimiting Line or
        the introduction into the Security Perimeter of any arms,
        ammunition or related equipment, except for the arms, ammunition
        or equipment of the Palestinian Police, authorized through the
        relevant DCO.

    d)  Activities of the Palestinian Police inside the Security
        Perimeter will be coordinated through the relevant DCO. Security
        activities in Israel in the vicinity of the Delimiting Line that
        directly affect the other side will be coordinated with the
        Palestinian Police through the relevant DCO.

3.  The Israeli Settlements

    a.  In accordance with the Declaration of Principles, during the
        interim period, the Gush Katif and Erez settlement areas, as
        well as the other settlements in the Gaza Strip, as delineated
        on attached map No. 1 by a blue line, will be under Israeli
        authority.

    b.  Palestinians will be free to move along the coast road and along
        the road from the Netzarim Junction to the seashore.

4.  The Yellow Areas

    a.  In the areas delineated by a broken red line and shaded in
        yellow on attached map No. 1 (hereinafter "the Yellow Areas"),
        and without derogating from Palestinian authority,
        responsibility will be shared as follows: The Israeli
        authorities will have the overriding responsibility and powers
        for security, and the Palestinian Authority will have the
        responsibility and powers for civil affairs, subject to this
        Agreement. In addition, with regard to the Yellow Areas,
        cooperation and coordination in security matters, including
        joint patrols, as agreed, will be implemented.

    b.  Entry of Palestinian policemen into the Yellow Areas and their
        activity therein may take place as agreed upon through the
        relevant DCO.

5.  The Mawasi Area

    a.  Two joint patrols will operate in the Mawasi area, the
        fishermen's wharves of Rafah and Khan Yunis, and along the coast
        road led by the Israeli vehicle.

    b.  Access of Palestinians to the Mawasi Area, as delineated on
        attached map No. 1, will be by the following roads:

        (1) Rafah – Tel Sultan – Mawasi;

        (2) Khan Yunis – El Bahr Village; and

        (3) Deir El Ballah – along the beach to the Mawasi.

    c.  The Mawasi Beach

        (1) Notwithstanding Israeli authority over the Gush Katif
            settlement area, the Palestinian Authority may operate
            sections of the Mawasi beach extending to the east up to the
            coast road, totalling, together with the Rafah and Khan
            Yunis wharves, five (5) kilometers.

        (2) Upon the completion of the withdrawal of Israeli military
            forces from the Gaza Strip and the Jericho Area, Israel will
            notify the Palestinian Authority of the locations of these
            sections.

        (3) These sections may be used for the following purposes:

            (a) sport and recreation, including boat hire facilities;

            (b) operating food establishments;

            (c) enlarging the wharves; and

            (d) expanding the facilities for fishermen, such as offices,
                wharehouses and cold storage facilities.

        (4) In these sections, the Palestinian Authority, in exercising
            its civil authority, will be able to grant licenses for
            businesses, collect fees and taxes, set and enforce public
            health standards and develop and manage the tourist sector.

        (5) In each of the fishermen's wharves, the Palestinian
            Authority may have an office building which shall be
            protected.

        (6) There will be not be any construction by Israelis of new
            sites along the beach.

        (7) During a period of three months from the signing of this
            Agreement, Israel may consider, in light of the security
            situation, the use by the Palestinian Authority of
            additional beach sections.

6.  The Egyptian Border

    The Military Installation Area along the Egyptian border in the Gaza
    Strip, as delineated on attached map No. 1 by a blue line and shaded
    in pink, will be under Israeli authority.

    The village of Dahaniya will remain part of the Military
    Installation Area pending a declaration of a general amnesty for the
    residents of the village, and provision having been made for their
    protection. Upon realization of the above amnesty and protection,
    the village of Dahaniya will become part of the Yellow Area.

7.  Lateral Roads to the Settlements

    a.  Without derogating from Palestinian authority and in accordance
        with the Declaration of Principles:

        (1) On the three lateral roads connecting the Israeli
            settlements in the Gaza Strip to Israel, namely: the
            Kissufim-Gush Katif road; the Sufa-Gush Katif road; and the
            Karni-Netzarim road, as delineated by a light blue line on
            attached map no. 1, including the adjacent sides upon which
            the security of traffic along these roads is dependent
            (hereinafter "the Lateral Roads"), the Israeli authorities
            will have all necessary responsibilities and powers in order
            to conduct independent security activity, including Israeli
            patrols.

        (2) Joint Israeli-Palestinian patrols will operate along the
            Lateral Roads. Such joint patrols will be led by the Israeli
            vehicle.

        (3) Where the Israeli authorities carry out engagement steps,
            they will do so with a view to transferring, at the earliest
            opportunity, the continued handling of the incidents falling
            within Palestinian responsibility, to the Palestinian
            Police.

        (4) Overpasses will be constructed on intersections between the
            Lateral Roads and the central North-South road (Road No. 4).

        (5) These arrangements will be reviewed by the JSC one year
            after the date of the signing of this Agreement.

    b.  Where the Lateral Roads overlap the Security Perimeter the two
        sides, in the exercise of their respective powers and
        responsibilities, will fully coordinate their activity in order
        to prevent friction.

8.  The Central North-South Road (Road No. 4) A joint patrol led by the
    Palestinian vehicle will be operated along the central North-South
    road (Road No. 4) in the Gaza Strip between Kfar Darom and Wadi
    Gaza.

9.  Joint Mobile Units

    a.  Joint Mobile Units will be located at the following junctions:

        (1) the Nissanit junction;

        (2) the Netzarim junction:

        (3) the Deir el-Ballah junction; and

        (4) the Sufa-Morag junction.

    b.  At the Netzarim junction, the Israeli side of this Joint Mobile
        Unit will check Israeli vehicles, which will then be able to
        continue their journey without interference. This Joint Mobile
        Unit will also operate as a Joint Patrol between the Netzarim
        Junction and Wadi Gaza under the direction of the relevant DCO.

10. Coordination and Cooperation in the Gaza Strip Two DCOs will
    function in the Gaza Strip as follows:

    a.  A DCO for the Gaza district, located at the Erez crossing point
        with subordinate Joint Liaison Bureaus at the Erez and Nahal Oz
        crossing points.

    b.  A DCO for the Khan Yunis district, located at the Nuriya Camp
        with subordinate Joint Liaison Bureaus at the Sufa crossing
        point and at the Rafah terminal.

                               Article V

               Security Arrangements in the Jericho Area

1.  Clarifications Concerning the Jericho Area With regard to the
    definition of the Jericho Area, as delineated on attached map No. 2,
    it is hereby clarified that Route No. 90 crossing Auja from South to
    North and the East-West road connecting Route No. 90 with Yitav, and
    their adjacent sides, shall remain under Israeli authority. For the
    purpose of this Article, the width of each such road and its
    adjacent sides, as shown on attached map No. 2, shall extend at
    least 12 meters on each side measured from its center.

2.  A Joint patrol led by the Palestinian vehicle shall operate along
    the main North-South road crossing Jericho (Route No. 90).

3.  Joint Mobile Units

    a.  A Joint Mobile Unit shall be located at the Auja junction being
        the intersection of Route No. 90 and the road to Yitav. This
        unit shall be led by the Israeli vehicle, and may be directed by
        the DCO to deal with certain incidents occurring on the road
        between Auja and Jericho in which Palestinians are involved.

    b.  A Joint Mobile Unit shall be located at the Nahal Elisha
        junction on the road from Jericho to the Mousa Allami project.

4.  Coordination and Cooperation in the Jericho Area A DCO located at
    the Vered Yericho crossing point will function in the Jericho Area
    and will maintain a subordinate Joint Liaison Bureau in the Allenby
    Terminal.

5.  a.  Pending the entry into force of the interim agreement, the holy
        site of Nebi Mousa will be under the auspices of the Palestinian
        Authority, for religious purposes.

    b.  During religious events that take place three times a year and
        other special occasions that will be coordinated with the
        Israeli authorities, Palestinians will have the right to
        religious pilgrimage to the al-Maghtas under the Palestinian
        flag.

    c.  Palestinian private projects, as well as joint ventures in
        accordance with the Declaration of Principles, will be located
        as agreed on the shore of the Dead Sea.

    d.  Safe passage will be provided from the Jericho Area to Nebi
        Mousa, al-Maghtas and the projects and ventures as agreed in
        subparagraph c. above on the shore of the Dead Sea for the
        aforementioned purposes.

6.  Within three months of the signing of this Agreement, Israel may
    consider, in light of the security situation, the possibility of
    widening of the Jericho Area.

                               Article VI

                    Security Arrangements Concerning
                     Planning, Building and Zoning

1.  Notwithstanding the provisions relating to planning, building and
    zoning set out elsewhere in this Agreement, the provisions of this
    Article shall apply with respect to the areas specified below.

2.  These arrangements will be reviewed within a period of six months
    from the signing of this Agreement and, thereafter, every six
    months, with a view to modifying them, with due consideration to
    Palestinian plans for establishing economic projects, and to the
    security concerns of both sides.

3.  The limitations set out below on the construction of buildings and
    installations in specific areas shall not require the demolition or
    removal of existing buildings or installations.

4.  The existing buildings, installations and natural and artificial
    culture in the Gaza Strip within a distance of 100 meters from the
    Delimiting Line shall remain as they are at present.

5.  Within the next 500 meters of the Security Perimeter, and within the
    Yellow Areas, buildings or installations may be constructed,
    provided that:

    a.  one building or installation may be constructed on each plot,
        the size of which shall not be less than 25 dunams; and

    b.  such building or installation shall not exceed two floors, of a
        size not exceeding 180 sq. meters per floor.

    The Palestinian Authority shall maintain the predominantly
    agricultural character of the remaining areas of the Security
    Perimeter.

6.  Buildings or installations shall not be constructed on either side
    of the Lateral Roads up to a distance of 75 meters from the center
    of these Roads.

7.  In the Jericho Area, no bridges or other structures will be built
    above Route No. 90 which may prevent the movement on this road of
    vehicles with a height of up to 5.25 meters.

8.  For the purpose of enforcing this Article, the United States will
    provide both sides with satellite photographs of the Gaza Strip
    depicting the buildings, installations and natural and artificial
    culture existing at the time of the signing of this Agreement.

                              Article VII

                          The Crossing Points

1.  General

    a.  Israel declares that work to relocate the Erez, Nahal Oz and
        Sufa crossing points currently within the Gaza Strip, to a
        location within Israel adjacent to the Delimiting Line, is
        underway. Israel will attempt to complete this work not later
        than 12 months from the date of the signing of this Agreement
        with regard to the Erez crossing point, and not later than 8
        months from the date of the signing of this Agreement with
        regard to the Nahal Oz and Sufa crossing points. Pending the

        completion of this work, Israel shall retain control over these
        crossing points and operate them in accordance with the
        provisions of this Article.

    b.  Israelis entering the Gaza Strip and the Jericho Area shall
        carry Israeli documentation (if they are above the age of 16)
        and, if driving a vehicle, a driving license and vehicle
        registration documentation recognized in Israel. Tourists to

        Israel entering the Gaza Strip and the Jericho Area shall carry
        their passports and other relevant documentation.

    c.  Entry of residents of the Gaza Strip and the Jericho Area to
        Israel shall be subject to Israeli laws and procedures
        regulating entry into Israel, and such residents shall be

        required to carry the identity card as agreed upon in this
        Agreement, as well as documentation specified by Israel and
        notified through the CAC to the Palestinian Authority.

    d.  The provisions of this Agreement shall neither prejudice the  
        use of safe passage nor Israel's right, for security and safety

        considerations, to close the crossing points to Israel and to

        prohibit or limit the entry into Israel of residents and of

        vehicles from the Gaza Strip and the Jericho Area.

2.  Passage between the Gaza Strip and Israel

    a.  Passage between the Gaza Strip and Israel will be via one or
        more of the following crossing points:

        (1) the Erez crossing point;

        (2) the Nahal Oz crossing point; and

        (3) the Sufa crossing point.

    b.  The Palestinian Authority may set up a checkpoint, within the  
        Gaza Strip, on the road leading to the Erez crossing point and
        on the road leading to the Nahal Oz crossing point, at locations

        to be coordinated between the two sides, for the purpose of
        inspection and identification of passengers and vehicles.
        Israelis and tourists to Israel passing through these
        checkpoints may be only required to identify themselves by
        presenting Israeli documentation or a passport, as set out in
        subparagraph 1.b. above. The above requirements shall not apply
        to uniformed members of the Israeli military forces.

    c.  The Palestinian Authority may set up a checkpoint, within the  
        Gaza Strip, on the road leading to the Sufa crossing point, at a
        location acceptable to both sides, for the purpose of inspection
        and identification of Palestinian passengers and vehicles.

        Israeli vehicles may bypass this checkpoint unimpeded.

    d.  Passage of Israelis, and tourists to Israel, between the Gaza  
        Strip and Israel may, in addition, be via the following crossing

        points:

        (1) the Karni crossing point;

        (2) the Kisufim crossing point;

        (3) the Kerem Shalom crossing point; and

        (4) the Elei Sinai crossing point.

    e.  Israelis, and tourists to Israel, who have passed through any of
        the above crossing points into the Gaza Strip shall not be

        required to undergo any inspection, identification or other
        requirement in addition to the stated provisions for entry into

        the Gaza Strip outlined in this Article.

        Tourists to the Gaza Strip and the Jericho Area from countries

        having diplomatic relations with Israel, who have passed through

        an international crossing, will not be required to pass any

        additional entry control before entry to Israel.

    f.  Arrangements for the movement of goods between the Gaza Strip

        and Israel through the crossing points are set out in Annex IV

    g.  A Palestinian liaison officer will be present at each of the

        crossing points on the Lateral Roads.

3.  Passage to and from the Jericho Area

    a.  Passage between the Jericho Area and the rest of the West Bank

        shall be governed by the same rules regulating the movement of
        persons and vehicles within the West Bank, and shall not need to

        be effected through designated crossing points.

    b.  Passage between the Jericho Area and Israel via the West Bank

        shall be governed by the currently applicable rules regulating

        the movement of persons and vehicles between the West Bank and

        Israel.

                                   Article VIII

                           Rules of Conduct in Security Matters

1.  Subject to the provisions of this Agreement, the security and public
    order personnel of both sides shall exercise their powers and
    responsibilities pursuant to this Agreement with due regard to
    internationally-accepted norms of human rights and the rule of law
    and shall be guided by the need to protect the public, respect human
    dignity and avoid harassment.

2.  In the Yellow Areas and on the Lateral Roads and their adjacent

    sides, vehicles bearing Israeli license plates shall not be stopped,
    obstructed or delayed by the Palestinian Police, and no
    identification shall be required.

3.  On the central North-South road (Road No. 4) in the Gaza Strip
    between the Netzarim Junction and Kfar Darom, and on the main
    North-South road crossing the Jericho Area (Route No. 90), vehicles
    bearing Israeli license plates may be stopped for identification by
    a Joint Patrol or a Joint Mobile Unit. The Israeli side of such a
    patrol or unit may carry out identity and vehicle documentation

    checks

4.  Without prejudice to the provisions of this Article regarding the
    areas mentioned in paragraphs 2 and 3 above, the following rules of
    conduct shall apply throughout the rest of the Gaza Strip and the
    Jericho Area:

    a.  Vehicles bearing Israeli license plates may be stopped by the
        Palestinian Police for the purpose of checking the driving

        license, and passengers' identity documentation (if above the

        age of sixteen).

    b.  Israelis shall under no circumstances be apprehended, arrested

        or placed in custody or prison by Palestinian authorities.

        However, where an Israeli is suspected of having committed of an
        offense, he or she may be detained in place by the Palestinian
        Police while ensuring his or her protection, in accordance with
        the provisions of Annex III, until the arrival of a Joint Patrol
        or Joint Mobile Unit, called immediately by the Palestinian

        Police, or of other Israeli representatives dispatched by the

        relevant DCO.

5.  Pedestrians may be required to produce identity documentation (if

    above the age of sixteen). Thereafter, they shall be treated in

    accordance with the Provisions of this Article

6.  Uniformed members of the Israeli military forces, as well as
    vehicles of the Israeli military forces, shall not be stopped by the
    Palestinian Police in any circumstances, and shall not be subject to

    any identification requirements. Without derogating from the above,

    in the event of suspicion regarding such a person or vehicle, the

    Palestinian Police may notify the Israeli authorities through the

    relevant DCO, in order to request appropriate assistance.

7.  Notwithstanding the provisions of this Article, persons who are
    subject to identification pursuant to this Article and who claim to
    be Israelis but cannot present appropriate identification
    documentation may be detained in place by the Palestinian Police, in

    accordance with the provisions of Annex III, until the arrival of a

    Joint Patrol or Joint Mobile Unit, called by the Palestinian Police,

    or of other Israeli representatives dispatched by the relevant DCO.

8.  a.  Each side shall enforce upon civilians subject to its authority
        a prohibition on possession or carrying weapons without a license.

    b.  The Palestinian Authority may grant licenses to possess or carry
        pistols for civilian use. The modalities for granting such

        licenses, as well as categories of persons who may be granted

        such licenses, will be agreed upon in the JSC.

9.  Rules of Engagement

    a.  For the purpose of this Article, "engagement" shall mean an

        an immediate response to an act or an incident constituting
        a danger to life or property that is aimed at preventing or

        terminating such an act or incident, or at apprehending its

        perpetrators.

    b.  Within the territory under the jurisdiction of the Palestinian

        Authority, in places where Israeli authorities exercise their

        security functions in accordance with this Annex, and in their

        immediate vicinities, the Israeli authorities may carry out

        engagement steps in cases where an act or an incident requires

        such action. In such cases, the Israeli authorities will take

        any measures necessary to   bring to an end such an act or

        incident with a view to transferring, at the earliest

        opportunity, the continued handling of the incident falling

        within the Palestinian responsibility to the Palestinian Police.

        The Palestinian Authority will immediately be notified, through

        the relevant DCO, of such engagement steps.

    c.  Engagement with the use of firearms shall not be allowed, except

        as a last resort after all attempts at controlling the act or
        the incident such as warning the perpetrator or shooting in the

        air have failed. Use of firearms should be aimed at deterring
        and not at killing the perpetrator. The use of firearms shall

        cease once the danger is past.

    d.  Any activity involving the use of firearms other than for
        immediate operational purposes shall be subject to prior

        notification to the relevant DCO.

10. If a person is injured or otherwise in need of assistance, such
    assistance will be provided by the side that first reaches the site.
    If such a person is under the authority of the other side, the

    assisting side shall notify the relevant DCO and the appropriate

    provisions of Article II of this Annex, as well as the provisions of

    Annex II, Article II, regarding arrangements for treatment and

    hospitalization, shall be applied.

                                  Article IX

                        Arrangements for Safe Passage

                 Between the Gaza Strip and the Jericho Area

1.  General

    a.  There shall be safe passage between the Gaza Strip and the
        Jericho Area for residents of the Gaza Strip and the Jericho

        Area and visitors to these areas from abroad, as detailed in

        this Article.

    b.  Israel will ensure safe passage during daylight hours (from

        sunrise to sunset) for persons and transportation.

    c.  Safe passage will be effected via the following designated

        crossing points:

        (1) the Erez crossing point; and

        (2) the Vered Yericho crossing point.

    d.  Israel will make safe passage available through one or more of

        the routes delineated on attached map No. 3.

2.  The usage of safe passage

    a.  As detailed below, persons using safe passage shall carry, in
        addition to the personal and vehicle documentation, the

        following documents:

        (1) a safe passage card; and

        (2) (for drivers only) a vehicle safe passage permit.

        Arrangements for implementation of safe passage, as well as
        modalities for the issuance by Israel of safe passage cards and
        vehicle safe passage permits, shall be discussed and agreed in

        the CAC.

    b.  Residents of the Gaza Strip and the Jericho Area in possession
        of a permit enabling them to enter Israel will be able to use

       this permit as a safe passage card.

    c.  Safe passage cards and vehicle safe passage permits shall be

        stamped by the Israeli authorities at the crossing point with
        the time of departure from the crossing point and the estimated

        time of arrival.

    d.  Residents of the Gaza Strip and the Jericho Area who are denied
        entry into Israel may be permitted by Israel to use safe passage

        in accordance with special arrangements to be made in each

        individual case through the JSC.

    e.  Special arrangements will apply with respect to passage of
        Palestinian leaders, senior Palestinian Authority officials and
        distinguished personalities. The CAC will define the scope and

        nature of these special arrangements, in consultation with the
        JSC.
   
    f.  The mode of passage of Palestinian policemen on duty, between
        the Gaza Strip and the Jericho Area, will be coordinated through
        the JSC.
   
    g.  Any additional matters relating to the usage of safe passage

        will be coordinated through the JSC.

3.  Passage and Mode of Transit

    a.  Persons and vehicles in transit under these arrangements shal
        neither break their journey nor depart from the designated

        routes, and shall complete the transit within the designated

        time stamped on their safe passage cards and permits, unless a

        delay is caused bye a medical emergency or a technical breakdown.

    b.  Persons using safe passage shall be subject to the laws and

        regulations applicable in Israel and in the West Bank
        respectively.

    c.  Persons and vehicles using safe passage shall not carry
        explosives, firearms or other weapons or ammunition, except
        for special cases that will be agreed to in the JSC.

4.  General Provisions Regarding the Routes

    a.  The above arrangements shall in no way affect the status of the

        routes used for safe passage.

    b.  Routes used for safe passage shall be closed on Yom Kippur,

        Israel's Memorial Day and Israel's Independence Day.

    c.  Without prejudice to the use of safe passage, Israel may, for

        security or safety reasons, temporarily modify the arrangements
        for safe passage. Notice of such temporary modification shall be

        given to the Palestinian authority through the JSC. At least one

        route of safe passage shall, however, remain open.

    d.  Israel shall notify the Palestinian Authority of incidents

        involving persons using safe passage.

                                Article X

                                Passages

1.  General

    a.  While Israel remains responsible during the interim period for
        external security, including along the Egyptian border and the
        Jordanian line, border crossing shall take place according to
        the arrangements included in this Article. These arrangements

        aim at creating a mechanism that facilitates the entry and exit

        of people and goods, reflecting the new reality created by the

        Declaration of Principles, while providing full security for

        both sides.

    b.  The arrangements included in this Article shall apply to the
        following border crossings:

        (1) the Allenby Bridge crossing; and

        (2) the Rafah crossing.

    c.  The same arrangements will be applied by the Parties, with the
        necessary adjustments, to agreed seaports, airports or other
        international crossings, such as the Abdullah and Damya bridges.

    d.  The two sides are determined to do their utmost to maintain the
        dignity of persons passing through the border crossings. To this

        end, the mechanism created will rely heavily on brief and modern

        procedures.

    e.  In each border crossing there will be one terminal, consisting

        of two wings. The first wing will serve Palestinian residents of

        the Gaza Strip and West Bank and visitors to these areas

        (hereinafter "the Palestinian Wing"). The second wing will serve

        Israelis and others (hereinafter "the Israeli Wing"). There will

        be a closed Israeli checking area and a closed Palestinian

        checking area, as set out below.

    f.  Special arrangements will apply to VIPs crossing through the

        Palestinian Wing. The liaison bureau to be established pursuant

        to paragraph 5 below (hereinafter "the Liaison Bureau") will

        define the scope and the nature of these special arrangements.

2.  Control and Management of the Passages

    a.  For the purpose of this Article, "passage" is defined to mean
        the area from the crossing barrier at the Egyptian border or the
        Allenby Bridge, passing through and including the terminal and:

        (1) with regard to the Allenby Bridge crossing, from the
            terminal up to the Jericho Area; and

        (2) with regard to the Rafah crossing, from the terminal up to
            the outer limit of the Israel military location along the

            Egyptian border.

    b.  (1) Israel will have the responsibility for security throughout
            the passage, includinq for the terminal.

        (2) An Israeli director-general will have the responsibility for
            the management and security of the terminal.

        (3) The director-general will have two deputies who will report
            to him:

            (a) an Israeli deputy who will be the manager of the Israeli

                Wing. Israel will have exclusive responsibility for the

                management of the Israeli Wing; and

            (b) a Palestinian deputy,- appointed by the Palestinian

                Authority, who will be the manager of the Palestinian Wing.

        (4) Each deputy will have an assistant for security and an
            assistant for administration. The assignments of the
            Palestinian deputies for security and administration will be
            agreed upon by the two sides.

        (5) There will be maximum coordination between the two sides.

            Both sides will maintain cooperation and coordination on
            matters of mutual concern.

        (6) The director-general will continue to use Palestinian
            contractors to provide bus services and other administrative

            and logistical services.

        (7) Palestinian policemen present at the terminal will be armed

            with handguns. Their deployment will be decided upon by the

            two sides. Other Palestinian officials present at the

            terminal will be unarmed.

        (8) The details of management and security and Liaison Bureau

            issues will be dealt with by the two sides.

        (9) The two sides will work together in order to seek ways for

            additional arrangements in the Rafah terminal.

        (10) Both sides will review these procedures in a year's time.

    c.  Except for the arrangements included in this Article, the

        current procedures and arrangements applicable outside the

        terminal shall continue to apply throughout the passage.

    d.  (1) Once incoming passengers have crossed the terminal, they

            will proceed to the Jericho Area or the Gaza Strip, as

            appropriate, without any interference from Israeli

            authorities (safe passage).

        (2) Outgoing passengers may proceed to the terminal without any
            interference from Israeli authorities after joint
            verification that such passengers hold the necessary
            documentation for exiting the area to Jordan or Egypt, as
            set out in this Agreement.

3.  Arrangements for Entry from Egypt and Jordan Through the Palestinian
    Wing

    a.  At the entrance to the Palestinian Wing there will be a

        Palestinian policeman and a raised Palestinian flag.

    b.  Before entering the Palestinian Wing, passengers will identify

        their personal luggage and it will be placed on a conveyor belt.

        Each side will be able to inspect such luggage inside its own

        checking area, using its own personnel and, if necessary, may

        open the luggage for inspection in the presence of the owner and

        a Palestinian policeman.

    c.  Persons entering the Palestinian Wing will pass through a
        magnetic gate. An Israeli policeman and a Palestinian policeman

        will be posted on each side of this gate. In the event of

        suspicion, each side will be entitled to require a physical

        inspection to be conducted in inspection booths to be located

        adjacent to the gate. Passengers will be inspected by a

        Palestinian policeman in the presence of an Israeli policeman.

        Accompanying personal belongings may also be inspected at this

        point.

    d.  Having completed the above phase, persons entering the
        Palestinian Wing will pass through one of three lanes for the

        purpose of identification and document control, as follows:

        (1) The first lane will be used by Palestinian residents of the
            Gaza Strip and the Jericho Area. These passengers will pass

            via a Palestinian counter, where their documents and

            identity will be checked. Their documents will be checked by

            an Israeli officer who will also check their identity

            indirectly in an invisible manner.

        (2) The second lane will serve other Palestinian residents of
            the West Bank. These passengers will first pass via a

            Palestinian counter, where their documents and identity will

            be checked. Then they will continue via an Israeli counter,

            where their documents and identity will be checked. The two

            counters will be separated by tinted glass and a revolving

            door.

        (3) The third lane will serve visitors to the Gaza Strip and
            West Bank. An identical procedure as in paragraph 3.d(2)

            above will apply to such visitors, except that they will

            first pass via the Israeli counter, and then continue via

            the Palestinian counter.

    e.  In the event of suspicion regarding a passenger in any of the

        three lanes described in subparagraph d. above, each side may
        question such passenger in its closed checking area. Suspicion
        justifying questioning in the closed checking area may be one of

        the following:

        (1) the passenger was involved, directly or indirectly, in
            criminal or planned criminal activity, in terrorist or
            planned terrorist activity and is not a beneficiary of the
            amnesty provisions of this Agreement.

        (2) the passenger conceals arms, explosives or related

            equipment;

        (3) the passenger holds forged or non-valid documentation or the
            details included in the documentation are inconsistent with

            those included in the population registry (in case of a

            resident) or in the data base (in case of a visitor), except

            that questions relating to such inconsistency will initially

            be raised at the counter and the passenger will be

            questioned in the closed checking area only if the suspicion

            has not been removed; or

        (4) the passenger acts in an obviously suspicious behavior

            during the passage via the terminal.

        If, at the conclusion of this questioning, the suspicion has not
        been removed, such passenger may be apprehended, after the other
        side has been notified. In case of a Palestinian suspect being

        apprehended by the Israeli side, a Palestinian policeman will be

        asked to meet with the suspect. Following notification to the

        Liaison Bureau, any further treatment of the apprehended person

        will be in accordance with Annex III.

    f.  In the Palestinian Wing, each side will have the authority to
        deny the entry of persons who are not residents of the Gaza

        Strip and West Bank.

        For the purpose of this Agreement, "residents of the Gaza Strip

        and West Bank" means persons who, on the date of entry into

        force of this Agreement, are registered as residents of these

        areas in the population registry maintained by the military

        government of the Gaza Strip and West Bank, as well as persons

        who have subsequently obtained permanent residency in these

        areas with the approval of Israel, as set out in this Agreement.

    g.  Following the above procedure, the passengers will collect their

        luggage and proceed to the customs area as described in Annex

        IV.

    h.  The Palestinian side will provide passengers whose entry is

        approved with an entry permit stamped by the Palestinian side

        and attached to their documents.

        At the conclusion of the direct and indirect checking of the

        documents and identity of passengers passing via the first lane
        and stamping their entry permits, the Palestinian officer will

        provide the passenger with a white card issued by the Israeli

        officer. A Palestinian official posted at the exit of the

        Palestinian Wing will verify that the passenger holds such a

        white card and will collect the cards with indirect and

        invisible Israeli checking.

        For passengers going through the second and third lanes, the
        Israeli officer will provide the passengers with a blue card,

        after checking their documents and identity, and verifying their

        entry permits. An Israeli and a Palestinian official posted at

        the exit of the Palestinian Wing will verify and collect the

        cards. White and blue cards collected will be checked by Israeli

        and Palestinian officials.

        In cases where either side denies the entry of a non-resident

        passenger, that passenger will be escorted out of the terminal

        and sent back to Jordan or Egypt, as appropriate, after

        notifying the other side.

4.  Arrangements for Exit to Egypt and Jordan Through The Palestinian
    Wing

    Passengers exiting to Egypt or Jordan through the Palestinian Wing

    will enter the terminal without their luggage. Thereafter, the same

    procedures described in paragraph 3 above will apply to them, except

    that the order of passing via the Israeli and Palestinian counters

    will be reversed.

5.  Liaison Bureau

    a.  There will be a liaison bureau at each crossing point in order

        to deal with matters arising regarding passengers passing

        through the Palestinian Wing, issues requiring coordination, and

        differences regarding the implementation of these arrangements.

        Without derogating from Israel's  responsibility for security,

        the bureau will also deal with incidents.

   b.  This bureau will be comprised of an equal number of
       representatives from each side and will be located at a

       specified location inside each terminal.

   c.  This bureau will be subordinate to the relevant subcommittee of
       the CAC.

6.  Miscellaneous

   a.  Special arrangements will be agreed upon by the two sides

       regarding the passage of goods, buses, trucks and
       privately-owned vehicles. Pending this agreement, the
       current arrangements will continue to apply.

   b.  Israel will attempt to complete the structural alterations on
       the Rafah and Allenby Bridge terminals not later than the date
       of the completion of the withdrawal of Israeli forces from the

       Gaza Strip and the Jericho Area. If these structural alterations

       are not completed by that time, the arrangements described in

       this Article shall apply, except for those arrangements that

       cannot be implemented without the structural alterations.

   c.  In order to cross through the crossing points into and out of

       the Gaza Strip and the Jericho Area, residents of these areas

       will use documents as detailed in Annex II. Pending the entry

       into force of the Interim Agreement, other West Bank residents

       will continue to use the existing documents issued by the

       military government and its Civil Administration .

                             Article XI

          Security Along the Coastline and in the Sea of Gaza

1.  Maritime Activity Zones

    a.  Extent of Maritime Activity Zones The sea off the coast of the
        Gaza Strip will be divided into three Maritime Activity Zones,

        K, L, and M as shown on map No. 6 attached to this Agreement,

        and as detailed below:

        (1) Zones K and M

            (a) Zone K extends to 20 nautical miles in the sea from the
                coast in the northern part of the sea of Gaza and 1.5
                nautical miles wide southwards.

            (b) Zone M extends to 20 nautical miles in the sea from the
                coast, and one (1) nautical mile wide from the Egyptian
                waters.

            (c) Subject to the provisions of this paragraph, Zones K and
                M will be closed areas, in which navigation will be
                restricted to activity of the Israel Navy.

        (2) Zone L

            (a) Zone L bounded to the south by Zone M and to the north
                by Zone K extends 20 nautical miles into the sea from

                the coast.

            (b) Zone L will be open for fishing, recreation and economic

                activities, in accordance with the following provisions:

                (i)   Fishing boats will not exit Zone L into the open
                      sea and may have engines of up to a limit of 25 HP
                      for outboard motors and up to a maximum speed of

                      15 knots for inboard motors. The boats will

                      neither carry weapons nor ammunition nor will they

                      fish with the use of explosives.

                (ii)  Recreational boats will be permitted to sail up to
                      a distance of 3 nautical miles from the coast

                      unless, in special cases, otherwise agreed within

                      the Maritime Coordination and Cooperation Center

                      as referred to in paragraph 3 below. Recreational

                      boats may have engines up to a limit of 10

                      horsepower. Marine motor bikes and water jets will

                      neither be introduced into Zone L nor be operated

                      therein.

                (iii) Foreign vessels entering Zone L will not approach

                      closer than 12 nautical miles from the coast

                      except as regards activities covered in paragraph

                      4 below.

    b.  General Rules of the Maritime Activity Zones

        (1) The aforementioned fishing boats and recreational boats and
            their skippers sailing in Zone L shall carry licenses issued

            by the Palestinian Authority, the format and standards of

            which will be coordinated through the JSC.

        (2) The boats shall have identification markings determined by

            the Palestinian Authority. The Israeli authorities will be

            notified through the JSC of these identification markings.

        (3) Residents of Israeli settlements in the Gaza Strip fishing

            in Zone L will carry Israeli licenses and vessel permits.

        (4) As part of Israel's responsibilities for safety and security

            within the three Maritime Activity Zones, Israel Navy

            vessels may sail throughout these zones, as necessary and

            without limitations, and may take any measures necessary

            against vessels suspected of being used for terrorist

            activities or for smuggling arms, ammunition, drugs, goods,

            or for any other illegal activity. The Palestinian Police

            will be notified of such actions, and the ensuing procedures

            will be coordinated through the Maritime Coordination and

            Cooperation Center.

2.  The Palestinian Coastal Police

    a.  The Palestinian Coastal Police may function in Zone L, up to a
        distance of 6 nautical miles from the coast. In special cases,

        it may also exercise control over Palestinian fishing boats

        fishing in Zone L in an additional area of 6 nautical miles, up

        to the limit of 12 nautical miles from the coastline, after

        clearance and coordination through the Maritime Coordination and

        Cooperation Center.

    b.  The Palestinian Coastal Police shall have up to 8 boats with a

        displacement of up to 30 tons. They will sail at a speed of up

        to 20 knots.

    c.  The boats shall carry weapons of up to a 7.62 mm caliber.

    d.  Boats of the Palestinian Coastal Police may fly a Palestinian

        flag, have police identification markings and shall operate

        identification lights.

    e.  The Parties shall cooperate on all sea matters, including mutual

        help at sea, and pollution and environmental issues.

    f.  The boats of the Palestinian Coastal Police will initially use

        the Gaza Wharf

    g.  Boats belonging to Israelis are solely subject to the control,

        authority and jurisdiction of Israel and the Israel Navy.

3.  Maritime Coordination and Cooperation Center

    a.  A Maritime Coordination and Cooperation Center (hereinafter "the

        MC") shall function as part of the JSC, to coordinate civil

        maritime activities and coastal police affairs off the coast of

        the Gaza Strip.

    b.  The MC shall function within the relevant DCO, and will

        determine its own rules of procedure.

    c.  The MC shall function 24 hours a day.

    d.  The MC shall be staffed by members of the Israel Navy and the

        Palestinian Coastal Police, each providing a liaison officer and

        an assistant liaison officer.

    e.  A direct radio telephone link (hot line) shall be set up between

        the Israel Navy vessels and the Palestinian Coastal Police

        vessels.

    f.  The role of the MC is to coordinate:

        (1) assistance between the Coastal Police and the Israel Navy as

            may be necessary to deal with incidents arising at sea;

        (2) Coastal Police training involving the use of firearms;

        (3) joint activities between the Coastal Police and the Israel

            Navy when pre-planning is operationally necessary;

        (4) radio contact between Coastal Police and Israel Navy vessels

            in the event that "hot line" communication between vessels

            of the two sides was not established;

        (5) search and rescue operations; and

        (6) maritime activities related to an agreed port, when

            established in the Gaza Strip.

4.  Gaza Strip Port

    a.  Plans for the establishment of a port in the Gaza Strip in
        accordance with the Declaration of Principles, its location, and
        related matters of mutual interest and concern, as well as

        licenses for vessels and crews sailing on international voyages

        will be discussed and agreed upon between Israel and the

        Palestinian Authority taking into consideration the provisions

        of Article X of this Agreement. To this end a special committee

        will be established by the two sides.

    b.  The Gaza Sea Port Authority referred to in the Declaration of
        Principles, shall act on behalf of the Palestinian Authority in

        accordance with the provisions of this Agreement.

    c.  Pending construction of a port, arrangements for entry and exit

        of vessels, passengers and goods by sea, as well as licenses for

        vessels and crews sailing on international voyages in transit to

        the Gaza Strip and the Jericho Area, shall be through Israeli

        ports in acordance with the relevant rules and regulations

        applicable in Israel and in accordance with the provisions of

        Annex IV .

                                  Article XII

                            Security of the Airspace

1.  Operation of aircraft for the use of the Palestinian Authority in
    the Gaza Strip and the Jericho Area shall be initiallv as follows:

    a.  Two (2) transport helicopters for VIP transportation within and

        between the Gaza Strip and the Jericho Area.

    b.  Four (4) up to twenty persons capacity fixed-wing transport

        aircraft, for transporting persons between the Gaza Strip and

        the Jericho Area.

2.  Changes in the number, type and capacity of aircraft may be

    discussed and agreed upon in a Joint Aviation Subcommittee

    (hereinafter "the JAC") to be established within the JSC.

3.  The Palestinian Authority may immediately establish and operate in
    the Gaza Strip and the Jericho Area provisional airstrips for the

    helicopters and fixed-wing aircraft referred to in subparagraphs 1.a

    and 1.b above, in accordance with arrangements and modalities to be

    discussed and agreed upon in the JAC.

4.  All aviation activity or usage of the airspace by any aerial vehicle

    in the Gaza Strip and the Jericho Area shall require prior approval

    of Israel. It shall be subject to Israeli air traffic control

    including, inter alia, monitoring and regulation of air routes as

    well as relevant regulations and requirements to be implemented in

    accordance with the Israel Aeronautical Information Publication, the

    relevant parts of which will be issued after consultation with the

    Palestinian Authority.

5.  Aircraft taking off from, and landing in the Gaza Strip and the
    Jericho Area shall be registered and licensed in Israel or in other

    states members of ICAO. Air crews of such aircraft shall be licensed

    in Israel or in such other states, provided that such licenses have

    been approved and recommended by the Palestinian Authority and

    validated by Israel.

6.  Aircraft referred to in this Article shall not carry firearms,

    ammunition, explosives or weapons systems, unless otherwise approved

    by both sides. Special arrangements for armed guards escorting

    high-ranking officials, will be agreed upon in the JAC.

7.  The location of navigational aids and other aviation equipment will

    be approved by Israel through the JAC.

8.  a.  The Palestinian Authority shall ensure that only the aviation

        activity in accordance with this Agreement will take place in

        the Gaza Strip and the Jericho Area.

    b.  Further powers and responsibilities may be transferred to the
        Palestinian Authority through the JAC.

    c.  The Palestinian Authority may establish a Palestinian Civil

        Aviation Department to act on its behalf in accordance with the
        provisions of this Article and of this Agreement.

9.  a.  Aviation activity by Israel will continue to be operated above
        the Gaza Strip and the Jericho Area, with the same limitations
        applicable in Israel regarding civil and military flights over
        densely-populated areas.

    b.  Israel will notify the Palestinian Authority of emergency rescue
        operations, searches and investigations of aerial accidents
        carried out in the Gaza Strip and the Jericho Area. Searches and
        investigations of civilian aircraft accidents will be conducted
        by Israel with the participation of the Palestinian Authority.

10. Commercial, domestic and international air services to, from and
    between the Gaza Strip and the Jericho Area may be operated by
    Palestinian, Israeli or foreign operators approved by both sides,
    certified and licensed in Israel or in ICAO member states
    maintaining bilateral aviation relations with Israel. Arrangements

    for such air services, beginning with a service between Gaza and

    Cairo using two (2) fixed-wing aircraft with capacity up to fifty
    passengers each, as well as arrangements regarding the establishment
    and operation of airports and air terminals in the Gaza Strip and

    the Jericho Area, will be discussed and agreed upon by the two sides

    in the JAC.

    Any such international commercial air services will be carried out
    in accordance with Israel's bilateral aviation agreements. The
    implementation phase will be discussed and agreed upon in the JAC.


                                ANNEX II

                   PROTOCOL CONCERNING CIVIL AFFAIRS

                               Article I

               Liaison and Coordination in Civil Matters

A.  Joint Civil Affairs Coordination and Cooperation Committee

    1.  A Joint Civil Affairs Coordination and Cooperation Committee
        (hereinafter "the CAC") is hereby established.

    2.  The functions of the CAC are to coordinate between the
        Palestinian Authority on one hand, and Israel and the Civil
        Administration that shall continue to function in the rest of
        the West Bank on the other hand, concerning the following
        day-to-day matters:

        a.  Civil matters, including issues concerning the transfer of
            powers and responsibilities from the Israeli military
            government and its Civil Administration to the Palestinian
            Authority.

        b.  Matters arising with regard to roads, power lines and other
            infrastructure which require coordination according to this
            Agreement.

        c.  Questions regarding passage to and from the Gaza Strip and
            the Jericho Area and safe passage between the Gaza Strip and
            the Jericho Area, including crossing points and
            international crossings.

        d.  Day-to-day contacts between the two sides as regards matters
            such as employment permits, hospitalization, transportation
            licensing, transfer of information, etc.

        e.  Joint projects, matters of mutual interest and other matters
            requiring coordination and cooperation.

    3.  The CAC shall be comprised of an equal number of representatives
        from Israel and from the Palestinian Authority, and shall
        convene at least once a month unless otherwise agreed.

        Each side may initiate the convening of a special meeting on
        short notice.

    4.  The CAC shall determine by agreement its mode of procedure.

    5.  Matters of principle and policy not settled within the CAC shall
        be passed on to the Joint Israeli-Palestinian Liaison Committee.

B.  Joint Regional Civil Affairs Subcommittees

    1.  The CAC shall establish two Joint Regional Civil Affairs
        Subcommittees (hereinafter "the Subcommittees") for the Gaza
        Strip and the Jericho Area respectively.

    2.  Each Subcommittee shall deal with the day-to-day civil affairs
        matters as detailed in paragraph A.2 above.

        The Jericho Area Subcommittee shall also coordinate the
        relations between the Palestinian Authority and the military
        government and Civil Administration in the rest of the West
        Bank.

    3.  Each Subcommittee may establish ad hoc working groups if and
        when the need arises.

    4.  Each Subcommittee shall be comprised of an equal number of
        representatives from Israel and from the Palestinian Authority
        and shall convene no less than once every two weeks.

C.  General

    1.  Means of communication shall be set up with a view to ensuring
        efficient and direct contact 24 hours a day, in order to deal
        with any urgent matter arising in the civil affairs field.

    2.  Each side shall inform the other of its representatives to each
        committee prior to a meeting. Meetings of the CAC and its
        subcommittees shall be organized and hosted by the two sides
        alternately unless otherwise agreed.

    3.  The provisions detailed above shall not impede daily contacts
        between representatives of Israel and of the Palestinian
        Authority in all matters of mutual concern.

                               Article II

             Transfer of Powers and Responsibilities of the
                          Civil Administration

A.  1.  The transfer of powers and responsibilities from the Israeli
        military government and its Civil Administration to the
        Palestinian Authority shall be coordinated through the CAC and
        implemented in accordance with the following arrangements in a
        smooth, peaceful and orderly manner.

    2.  Preparations for the transfer of such powers and
        responsibilities shall commence immediately upon the signing of
        this Agreement, and shall be completed within 21 days.

        a.  The Israeli authorities shall provide all necessary
            assistance to the Palestinian Authority, including access to
            offices, registers, records, systems and equipment and all
            necessary information, data and statistics required for the
            transfer of powers and responsibilities.

        b.  Israel shall provide the Palestinian Authority with all the
            details as described in subparagraph 38 below.

    3.  On the date fixed for the transfer of powers and
        responsibilities, Israel shall transfer from the possession of
        the Israeli military government and its Civil Administration to
        the Palestinian Authority offices, budgetary allocations,
        financial funds and accounts, equipment, registers, files,
        computer programs and other movable property necessary for its
        functioning.

B.  All powers and responsibilities of the Civil Administration shall be
    transferred to the Palestinian Authority in the Gaza Strip and the
    Jericho Area, in accordance with the following provisions:

    1.  Interior Affairs:

        This sphere includes, inter alia, municipal affairs, licensing
        of newspapers and publications, censorship of films and plays
        and appointment of Mukhtars. In the Gaza Strip, this sphere
        shall also include fire fighting and Ottoman Societies.

    2.  Fisheries:

        a.  This sphere includes, inter alia, licensing of fishermen,
            marine agriculture and vessels' permits.

        b.  Security restrictions are dealt with in Annex I, Article XI.

    3.  Surveying:

        This sphere includes, inter alia, licensing of surveyors and
        performing surveys in areas falling within the Palestinian
        Authority's jurisdiction.

    4.  Statistics:

        a. The transfer of powers and responsibilities in this sphere
        includes inter alia transfer of research reports and
        publications prepared by the Department of Statistics.

        b. The application and validity of censuses which may be
        conducted by the Palestinian Authority shall be subject to the
        provisions of subparagraph 27.l below.

        c. Methods of cooperation regarding the collection of data on
        the movement of goods, services and labor between Israel and the
        Gaza Strip and the Jericho Area is dealt with in Annex IV.

    5.  Comptrol

    6.  Civil Administration Employees:

        The Palestinian Authority assures that it shall keep employing
        the present Palestinian Civil Administration employees in the
        Gaza Strip and the Jericho Area and shall maintain their rights.

  


                            Annex III

                   PROTOCOL CONCERNING LEGAL MATTERS

                               Article I

                         Criminal Jurisdiction

1.  The criminal jurisdiction of the Palestinian Authority covers all
    offenses committed in the areas under its territorial jurisdiction
    (hereinafter, for the purposes of this Annex, "the Territory")
    subject to the provisions of this Article.

2.  Israel has sole criminal jurisdiction over the following offenses:

    a.  offenses committed in the Settlements and the Military
        Installation Area subject to the provisions of this Annex; and

    b.  offenses committed in the Territory by Israelis.

3.  In exercising their criminal jurisdiction, each side shall have the
    power, inter alia, to investigate, arrest, bring to trial and punish
    offenders.

4.  In addition, and without derogating from the territorial
    jurisdiction of the Palestinian Authority, Israel has the power to
    arrest and to keep in custody individuals suspected of having
    committed offenses which fall within Israeli criminal jurisdiction
    as noted in paragraphs 2 and 7 of this Article, who are present in
    the Territory, in the following cases:

    a.  The individual is an Israeli, in accordance with Article II of
        this Annex; or

    b.  (1) The individual is a non-Israeli suspected of having just
            committed an offense in a place where Israeli authorities
            exercise their security functions in accordance with Annex
            I, and is arrested in the vicinity in which the offense was
            committed. The arrest shall be with a view to transferring
            the suspect, together with all evidence, to the Palestinian
            Police at the earliest opportunity.

        (2) In the event that such an individual is suspected of having
            committed an offense against Israel or Israelis, and there
            is a need for further legal proceedings with respect to that
            individual, Israel may retain him or her in custody and the
            question of the appropriate forum for prosecuting such a
            suspect shall be dealt with by the Legal Committee on a
            case-by-case basis.

5.  In the case of an offense committed in the Territory by a
    non-Israeli against Israel or an Israeli, the Palestinian Authority
    shall take measures to investigate and prosecute the case, and shall
    report to Israel on the result of the investigation and any legal
    proceedings.

6.  a.  Tourists in transit to or from Israel through the Gaza Strip or
        the Jericho Area, who are present on the Lateral Roads or on the
        main North-South road crossing the Jericho Area (Route No. 90),
        may be arrested and questioned only by the Israeli authorities
        which shall notify the Palestinian Authority. Where the Israeli
        authorities conclude that an offense under the prevailing law
        has been committed, and that further legal proceedings in
        respect of the tourist are required, such proceedings shall be
        taken by the Palestinian Authority.

    b.  Where such a tourist present outside these areas is detained or
        arrested by the Palestinian Authority, it shall notify the
        Israeli authorities immediately and shall enable them at the
        earliest opportunity to meet the detainee and to provide any
        necessary assistance, including consular notification, requested
        by the detainee.

7.  Nothing in this Article shall derogate from Israel's criminal
    jurisdiction in accordance with its domestic laws over offenses
    committed outside Israel (including in the Territory) against Israel
    or an Israeli with due regard to the principle that no person can be
    tried twice for the same offense. The exercise of such jurisdiction
    shall be subject to the provisions of this Annex and without
    prejudice to the criminal jurisdiction of the Palestinian Authority.

                               Article II

                  Legal Assistance in Criminal Matters

1.  General

    a.  Israel and the Palestinian Authority shall cooperate and provide
        each other with legal assistance in criminal matters. Such
        cooperation shall include the arrangements detailed in this
        Article.

    b.  For the purpose of this Article, "Israeli military forces" may
        include Israel Police and other Israeli security forces.

    c.  Documents served by one Party in the territory under the
        responsibility of the other, shall be accompanied by a certified
        translation into the official language of the other Party.

2.  Cooperation in Criminal Matters

    a.  The Israel Police and the Palestinian Police shall cooperate in
        the conduct of investigations. Subject to detailed arrangements
        to be agreed upon, such cooperation shall include the exchange
        of information, records and fingerprints of criminal suspects,
        vehicle ownership registration records, etc.

    b.  Where an offense is committed in the Territory by an Israeli
        acting jointly with an individual under Palestinian personal
        jurisdiction, the Israeli military forces and the Palestinian
        Police will cooperate in conducting an investigation.

    c.  The Palestinian authorities shall not arrest or detain Israelis
        or place them in custody. Israelis can identify themselves by
        presenting Israeli documentation.

        However, where an Israeli commits a crime against a person or
        property in the Territory the Palestinian Police upon arrival at
        the scene of the offense shall immediately notify the Israeli
        authorities through the relevant DCO. Until the arrival of the
        Israeli military forces the Palestinian Police may, if
        necessary, detain the suspect in place while ensuring his
        protection and the protection of all those involved and shall
        prevent interference with the scene of the offense, collect the
        necessary evidence and conduct preliminary questioning.

    d.  Without derogating from the jurisdiction of the Palestinian
        Authority over property located or transported within the
        Territory, where the property is being transported or carried by
        an Israeli, the following procedure shall apply: The Palestinian
        authorities have the power to take any measures necessary in
        relation to Israeli vehicles or personal belongings where such
        vehicle or belongings have been used in commission of a crime
        and present an immediate danger to public safety or health. When
        such measures are taken the Palestinian authorities shall
        immediately notify the Israeli authorities through the relevant
        DCO, and shall continue to take the necessary measures until
        their arrival.

3.  a.  When an Israeli is suspected of committing an offense and is
        present in the Territory, the Israeli military forces shall be
        able to arrest, search and detain the suspect as required, in
        the presence of and with the assistance of the Palestinian
        Police.

    b.  When an Israeli commits an offense and is present in the Yellow
        Areas or on the Lateral Roads and their adjacent sides as
        defined in Annex I, the Israeli military forces may, without
        derogating from the territorial jurisdiction of the Palestinian
        Authority, arrest, search and detain the offender and shall
        notify the Palestinian Police immediately, provide it with all
        necessary information, and coordinate wherever possible.

4.  When an offense is committed inside a Settlement, and all those
    involved are Palestinians of the Gaza Strip or the Jericho Area or
    their visitors, the Israeli military forces shall notify the
    Palestinian Police immediately and shall hand over the offender and
    the collected evidence to the Palestinian Police unless the offense
    is security- related.

5.  Restraining Orders

    Each side shall execute orders issued by the competent organ of the
    other side restraining a person under the jurisdiction of that side
    from travelling abroad.

6.  Summons and Questioning of Witnesses

    a.  Where the statement of a witness who is an Israeli or other
        person present in Israel is required for a Palestinian
        investigation, the statement shall be taken by the Israel Police
        in the presence of a Palestinian Police officer in an Israeli
        facility at an agreed location.

    b.  Where the statement of a non-Israeli witness present in the
        Territory is required for an Israeli investigation, the
        statement shall be taken by the Palestinian Police in the
        presence of an Israeli police officer in a Palestinian facility
        at an agreed location.

    c.  In exceptional cases, each side may take a statement requested
        by the other side itself, without the presence of the requesting
        side.

7.  Transfer of Suspects and Defendants

    a.  Where a non-Israeli suspected of, charged with or convicted of
        an offense that falls within Palestinian criminal jurisdiction
        is present in Israel, the Palestinian Authority may request
        Israel to arrest and transfer the individual to the Palestinian
        Authority.

    b.  Where an individual suspected of, charged with or convicted of
        an offense that falls within Israeli criminal jurisdiction is
        present in the Territory, Israel may request the Palestinian
        Authority to arrest and transfer the individual to Israel.

    c.  Requests under subparagraphs a. and b. above shall specify the
        grounds for the request and shall be supported by an arrest
        warrant issued by a competent court.

    d.  Where the request is for the transfer of a suspect who is not a
        Palestinian requested by the Palestinian Authority:

        (1) the arrest warrant shall only be issued pursuant to an
            application made by or on behalf of the Attorney-General,
            confirming that there is reasonable evidentiary basis that
            the offense was committed by the suspect;

        (2) the offense must be punishable by not less than 7 years'
            imprisonment under the law of the requesting side.

    e.  (1) Individuals suspected of offenses punishable by less than 7
            years' imprisonment shall be interrogated by the
            investigating side in a facility of the other side or at an
            agreed location.

        (2) Interrogation shall take place in the presence of a police
            officer of the other side.

        (3) Upon the request of the investigating side the other side
            may detain the suspect in custody pending and during the
            questioning.

        (4) Where the presence of the suspect is required for an
            objective reason such as confronting witnesses and
            identification of site, the suspect shall be transferred for
            that purpose only.

    f.  (1) Both sides, upon receipt of a request in accordance with
            this Article, shall effect the arrest and transfer
            requested.

        (2) If the individual requested is detained in custody or is
            serving a prison sentence, the side receiving the request
            may delay the transfer to the requesting side for the
            duration of the detention or imprisonment.

    g.  No person shall be transferred in respect of an offense
        punishable by capital punishment unless the requesting side
        undertakes that capital punishment shall not be imposed in the
        case.

    h.  (1) Both sides shall take all necessary measures to ensure that
            the treatment of individuals transferred under this Article
            complies with the applicable legal arrangements in Israel
            and in the Territory and with internationally- accepted
            norms of human rights regarding criminal investigations.

        (2) Suspects transferred under this paragraph shall have the
            right to be assisted during the investigation period by an
            advocate of their own choice.

    i.  Each side may, upon the request of the other side, detain, for
        no more than seven days, an individual in respect of whom a
        request for arrest and transfer is to be made, pending the
        submission of such a request.

    j.  The transfer of foreigners by Israel to the Palestinian
        Authority under this Article shall be subject to the applicable
        conventions to which Israel is a party and in coordination with
        the foreigner's state of origin.

    k.  Both sides may agree that an individual convicted in the courts
        of one side shall serve his sentence in a prison of the other
        side, subject to arrangements and conditions to be agreed
        between the sides.

8.  Assistance in the Execution of Court Orders for the Purposes of
    Investigation

    a.  Israel and the Palestinian Authority shall execute orders issued
        by each others' courts for the purposes of investigations (e.g.,
        search warrants, orders for the production of documents and
        seizure orders), subject to the provisions of local law.

    b.  Where, for the purposes of an investigation, Israel or the
        Palestinian Authority requires that tests or examinations (such
        as fingerprinting or blood analysis) be effected in relation to
        an item situated in territory under the responsibility of the
        other side, that side shall effect the tests or examinations
        required and transfer the results to the side conducting the
        investigation. Where these results are not sufficient for the
        purposes of the investigation, arrangements shall be made for
        the transfer of the item to the side conducting the
        investigation.

9.  Legal Assistance in the Conduct of Judicial Proceedings

    a.  Summons and subpoenas issued by an Israeli court in respect of
        defendants and witnesses present in the Territory, shall be
        effected through the Palestinian Authority which shall be
        responsible for the service of summons, and the execution of
        subpoenas by the Palestinian Police. Subpoenas issued in respect
        of an Israeli defendant or witness shall be executed by the
        Israeli military forces in the presence of and with the
        assistance of the Palestinian Police.

    b.  Summons or subpoenas issued by a Palestinian court in respect of
        defendants and witnesses present in Israel shall be effected
        through the Israel Police who shall be responsible for the
        service of summons and the execution of subpoenas.

    c.  Where the evidence of an Israeli witness is required in
        connection with proceedings conducted by a Palestinian court,
        the evidence of the witness shall be taken at a Palestinian
        court situated at an agreed location close to one of the
        crossing points, and the witness shall be accompanied by
        representatives of the Israeli military forces together with the
        Palestinian Police.

    d.  Where the evidence of a witness is required in connection with
        proceedings conducted by a court of one side, such a request
        will be notified to the authorities of the other side to summon
        the witness.

                              Article III

                           Civil Jurisdiction

1.  The Palestinian courts and judicial authorities have jurisdiction in
    all civil matters, subject to this Agreement.

2.  Israelis conducting commercial activity in the Territory are subject
    to the prevailing civil law in the Territory relating to that
    activity.

    Nevertheless, any enforcement of judicial and administrative
    judgments and orders issued against Israelis and their property
    shall be effected by Israel. Israel undertakes to execute such
    judgments and orders within a reasonable time.

3.  The Palestinian courts and judicial authorities have no jurisdiction
    over civil actions in which an Israeli is a party, except for the
    following cases:

    a.  the subject matter of the action is an ongoing Israeli business
        situated in the Territory (the registration of an Israeli
        company as a foreign company in the Territory being evidence of
        the fact that it has an ongoing business situated in the
        Territory);

    b.  the subject matter of the action is real property located in the
        Territory;

    c.  the Israeli party is a defendant in the action and has consented
        to such jurisdiction by notice in writing to the Palestinian
        court or judicial authority;

    d.  the Israeli party is a defendant in an action the subject matter
        of which is a written agreement, and the Israeli party has
        consented to such jurisdiction by a specific provision in this
        agreement;

    e.  the Israeli party is a plaintiff who has filed an action in the
        Territory. If the defendant in the action is an Israeli, his
        consent to such jurisdiction in accordance with subparagraphs c.
        or d. above shall be required; or

    f.  actions concerning other matters as agreed between the Parties.

4.  The jurisdiction of the Palestinian courts and judicial authorities
    does not cover actions against the State of Israel including its
    statutory entities, organs and agents.

                               Article IV

                   Legal Assistance in Civil Matters

1.  Service of Legal Documents Israel and the Palestinian Authority will
    be responsible, in the areas under their respective territorial
    responsibility, for the service of legal documents, including
    subpoenas, issued by the judicial organs under the responsibility of
    the other Party.

2.  Interim Orders

    a.  Interim orders (e.g., temporary orders of attachment, the
        appointment of a receiver, restraining orders) issued by
        judicial organs under the responsibility of either Party will
        not have effect in the areas under the territorial
        responsibility of the other Party.

    b.  Judicial organs under the responsibility of both Parties will be
        authorized to issue interim orders which shall apply in the
        areas under their territorial responsibility, even in cases in
        which the primary action was filed with the judicial organs
        under the responsibility of the other Party.

    c.  The judicial organs of each side may issue orders restraining an
        individual from travelling abroad when the order relates to a
        matter being tried by that organ, subject to the relevant
        provisions of the domestic laws.

3.  Taking of evidence

    Israel and the Palestinian Authority will make arrangements for
    taking evidence from witnesses, when necessary, within the areas
    under their territorial responsibility, when such evidence is sought
    in connection with proceedings conducted by the judicial organs
    under the responsibility of the other side.

4.  Enforcement of judgements

    a.  Israel and the Palestinian Authority will enforce judgements
        rendered by the judicial organs under the responsibility of the
        other Party, provided that the judicial organ concerned had the
        jurisdiction to render the judgement and further provided that
        the enforcement is not contrary to public policy. The execution
        office under the responsibility of Israel and the Palestinian
        Authority shall execute such judgements as if rendered by their
        own judicial organs.

    b.  In executing any judgement against Israelis the Palestinian
        execution offices will be authorized to issue orders (e.g.,
        attachments, receivership, eviction) against Israeli property
        within the Territory.

    c.  Orders against the freedom of Israelis (e.g., imprisonment
        orders, restraining orders) shall only be issued by Israeli
        execution offices.

    d.  All orders issued by execution offices against Israelis or
        Israeli property within the Territory will be executed by the
        Israel Police with the assistance of the Palestinian Authority,
        or where the Israel Police notifies the Palestinian Authority
        that it has no objection, by the Palestinian Police.



                   PROTOCOL ON ECONOMIC RELATIONS
                               between
                the Government of the State of Israel
                                 and
           the P.L.O., representing the Palestinian people

                              PREAMBLE

The two parties view the economic domain as one of the cornerstone in
their mutual relations with a view to enhance their interest in the
achievement of a just, lasting and comprehensive peace. Both parties
shall cooperate in this field in order to establish a sound economic
base for these relations, which will be governed in various economic
spheres by the principles of mutual respect of each other's economic
interests, reciprocity, equity and fairness.

This protocol lays the groundwork for strengthening the economic base
of the Palestinian side and for exercising its right of economic
decision making in accordance with its own development plan and
priorities. The two parties recognise each other's economic ties with
other markets and the need to create a better economic environment
for their peoples and individuals.

                              Article I

                FRAMEWORK AND SCOPE OF THIS PROTOCOL

1.  This protocol establishes the contractual agreement that will
    govern the economic relations between the two sides and will
    cover the West Bank and the Gaza Strip during the interim period.
    The implementation will be according to the stages envisaged in
    the Declaration of Principles on Interim Self Government
    Arrangements signed in Washington D.C. on September 13, 1993 and
    the Agreed Minutes thereto. It will therefore begin in the Gaza
    Strip and the Jericho Area and at a later stage will also apply
    to the rest of the West Bank, according to the provisions of the
    Interim Agreement and to any other agreed arrangements between
    the two sides.

2.  This Protocol, including its Appendixes, will be incorporated
    into the Agreement on the Gaza Strip and the Jericho Area (in
    this Protocol – the Agreement), will be an integral part thereof
    and interpreted accordingly. This paragraph refers solely to the
    Gaza Strip and the Jericho Area.

3.  This Protocol will come into force upon the signing of the
    Agreement.

4.  For the purpose of this Protocol, the term "Areas" means the
    areas under the jurisdiction of the Palestinian Authority,
    according to the provisions of the Agreement regarding
    territorial jurisdiction.
    The Palestinian Jurisdiction in the subsequent agreements could
    cover areas, spheres or functions according to the Interim
    Agreement. Therefore, for the purpose of this Protocol, whenever
    applied, the term "Areas" shall be interpreted to mean functions
    and spheres also, as the case may be, with the necessary
    adjustments.

                             Article II

                    THE JOINT ECONOMIC COMMITTEE

1.  Both parties will establish a Palestinian-Israeli Joint Economic
    Committee (hereinafter – the JEC) to follow up the implementation
    of this Protocol and to decide on problems related to it that may
    arise from time to time. Each side may request the review of any
    issue related to this Agreement by the JEC.

2.  The JEC will serve as the continuing committee for economic
    cooperation envisaged in Annex III of the Declaration of
    Principles.

3.  The JEC will consist of an equal number of members from each side
    and may establish sub-committees specified in this Protocol.

    A sub-committee may include experts as necessary.

4.  The JEC and its sub-committees shall reach their decisions by
    agreement and shall determine their rules of procedure and
    operation, including the frequency and place or places of their
    meetings.

                            Article  III

                   IMPORT TAXES AND IMPORT POLICY

1.  The import and customs policies of both sides will be according
    to the principles and arrangements detailed in this Article.

2.  a. The Palestinian Authority will have all powers and
       responsibilities in the sphere of import and customs policy
       and procedures with regard to the following:

       (1) Goods on List Al, attached hereto as Appendix I
           locally-produced in Jordan and in Egypt particularly and
           in the other Arab countries, which the Palestinians will
           be able to import in quantities agreed upon by the two
           sides up to the Palestinian market needs as estimated
           according to para 3 below.

       (2) Goods on List A2, attached hereto as Appendix II, from the
           Arab, Islamic and other countries, which the Palestinians
           will be able to import in quantities agreed upon by the
           two sides up to the Palestinian market needs as estimated
           according to para 3 below.

    b. The import policy of the Palestinian Authority for Lists Al
       and A2 will include independently determining and changing
       from time to time the rates of customs, purchase tax, levies,
       excises and other charges, the regulation of licensing
       requirements and procedures and of standard requirements. The
       valuation for custom purposes will be based upon the GATT 1994
       agreement as of the date it will be introduced in Israel, and
       until then – on the Brussels Definition of Valuation (BDV)
       system. The classification of goods will be based on the
       principles of "the Harmonized Commodity Description and Coding
       System". Concerning imports referred to in Article VII of this
       Protocol (Agriculture), the provisions of that Article will
       apply.

3.  For the purposes of para 2(a) above, the Palestinian market needs
    for 1994 will be estimated by a sub-committee of experts. These
    estimates will be based on the best available data regarding past
    consumption, production, investment and external trade of the
    Areas. The sub-committee will submit its estimate within three
    months from the signing of the Agreement. These estimates will be
    reviewed and updated every six months by the sub-committee, on
    the basis of the best data available regarding the latest period
    for which relevant data are available, taking into consideration
    all relevant economic and social indicators. Pending an agreement
    on the Palestinian market needs, the previous period's estimates
    adjusted for population growth and rise in per-capita GNP in the
    previous period, will serve as provisional estimates.

4.  The Palestinian Authority will have all powers and
    responsibilities to independently determine and change from time
    to time the rates of customs, purchase taxes; levies, excises and
    other charges on the goods on List B, attached hereto as Appendix
    III, of basic food items and other goods for the Palestinian
    economic development program, imported by the Palestinians to the
    Areas.

5.  a. With respect to all goods not specified in Lists Al, A2 and B,
       and with respect to quantities exceeding those determined in
       accordance with paras 2(a) & 3 above (hereinafter – the
       Quantities), the Israeli rates of customs, purchase tax,
       levies, excises and other charges, prevailing at the date of
       signing of the Agreement, as changed from time to time, shall
       serve as the minimum basis for the Palestinian Authority. The
       Palestinian Authority may decide on any upward changes in the
       rates on these goods and exceeding quantities when imported by
       the Palestinians to the Areas.

    b. With respect to all goods not specified in Lists A1 and A2,
       and with respect to quantities exceeding the Quantities,
       Israel and the Palestinian Authority will employ for all
       imports the same system of importation, as stipulated in para
       10 below, including inter alia standards, licensing, country
       of origin, valuation for customs purposes etc.

6.  Each side will notify the other side immediately of changes made
    in rates and in other matters of import policy, regulations and
    procedures, determined by it within its respective powers and
    responsibilities as detailed in this Article. With regard to
    changes which do not require immediate application upon decision,
    there will be a process of advance notifications and mutual
    consultations which will take into consideration all aspects and
    economic implications.

7.  The Palestinian Authority will levy VAT at one rate on both
    locally produced goods and services and on imports by the
    Palestinians (whether covered by the three Lists mentioned above
    or not), and may fix it at the level of 15% to 16%.

8.  Goods imported from Jordan, Egypt and other Arab countries
    according to para 2(a)(1) above (List A1) will comply with rules
    of origin agreed upon by a joint sub-committee within three
    months of the date of the signing of the Agreement. Pending an
    agreement, goods will be considered to have been "locally
    produced" in any of those countries if they conform with all the
    following:

    a. (i) They have been wholly grown, produced, or manufactured in
       that country, or have been substantially transformed there
       into new or different goods, having a new name, character, or
       use, distinct from the goods or materials from which they were
       so transformed;

       (ii) They have been imported directly from the said country;

       (iii) The value or the costs of the materials produced in that
       country, plus the direct processing costs in it, do not fall
       short of 30 percent of the export value of the goods. This
       rate may be reviewed by the joint committee mentioned in para
       16 a year after the signing of the Agreement.

       (iv) The goods are accompanied by an internationally
       recognized certificate of origin;

       (v) No goods will be deemed as substantially new or different
       goods, and no material will be eligible for inclusion as
       domestic content, by virtue of having merely undergone simple
       combining or packaging, or dilution with water or other
       substances, which do not materially alter the characteristics
       of the said goods.

9.  Each side will issue import licences to its own importers,
    subject to the principles of this Article and will be responsible
    for the implementation of the licensing requirements and
    procedures prevailing at the time of the issuance of the
    licenses.
    Mutual arrangements will be made for the exchange of information
    relevant to licensing matters.

10. Except for the goods on Lists A1 and A2 and their Quantities – in
    which the Palestinian Authority has all powers and
    responsibilities, both sides will maintain the same import policy
    (except for rates of import taxes and other charges for goods in
    List B) and regulations including classification, valuation and
    other customs procedures, which are based on the principles
    governing international codes, and the same policies of import
    licensing and of standards for imported goods, all as applied by
    Israel with respect to its importation. Israel may from time to
    time introduce changes in any of the above, provided that changes
    in standard requirements will not constitute a non-tariff-barrier
    and will be based on considerations of health, safety and the
    protection of the environment in conformity with Article 2.2. of
    the Agreement on Technical Barriers to trade of the Final Act of
    the Uruguay Round of Trade Negotiations.
    Israel will give the Palestinian Authority prior notice of any

    such changes, and the provisions of para 6 above will apply.

11. a. The Palestinian Authority will determine its own rates of
       customs and purchase tax on motor vehicles imported as such,
       to be registered with the Palestinian Authority. The vehicle
       standards will be those applied at the date of the signing of
       the Agreement as changed according to para 10 above.
       However, the Palestinian Authority may request, through the
       sub-committee on transportation, that in special cases
       different standards will apply.
       Used motor vehicles will be imported only if they are
       passenger cars or dual-purpose passenger cars of a model of
       no more than three years prior to the importation year. The
       sub-committee on transportation will determine the procedures
       for testing and confirming that such used cars comply with the
       standards' requirements for that model year.
       The issue of importing commercial vehicles of a model prior to
       the importation year will be discussed in the joint
       sub-committee mentioned in para 16 below.

    b. Each side may determine the terms and conditions for the
       transfer of motor vehicles registered in the other side to the
       ownership or use of a resident of its own side, including the
       payment of the difference of import taxes, if any, and the
       vehicle having been tested and found compatible with the
       standards required at that time by its own registration
       administration, and may prohibit transfer of vehicles.

12. a. Jordanian standards, as specified in the attached Appendix I,
       will be acceptable in importing petroleum products into the
       Areas, once they meet the average of the standards existing in
       the European Union countries, or the USA standards, which
       parameters have been set at the values prescribed for the
       geographical conditions of Israel, the Gaza Strip and the West
       Bank.
       Cases of petroleum products which do not meet these
       specifications will be referred to a joint experts' committee
       for a suitable solution. The committee may mutually decide to
       accept different standards for the importation of gasoline
       which meet the Jordanian standards even though, in some of
       their parameters, they do not meet the European Community or
       USA standards. The committee will give its decision within six
       months.
       Pending the committee's decision, and for not longer than six
       months of the signing of the Agreement, the Palestinian

       Authority may import to the Areas, gasoline for the
       Palestinian market in the Areas, according to the needs of
       this market, provided that:

       (1) this gasoline is marked in a distinctive colour to
           differentiate it from the gasoline marketed in Israel; and

       (2) the Palestinian Authority will take all the necessary
           steps to ensure that this gasoline is not marketed in
           Israel.

    b. The difference in the final price of gasoline to consumers in
       Israel and to consumers in the Areas, will not exceed 15% of
       the official final consumer price in Israel. The Palestinian
       Authority has the right to determine the prices of petroleum
       products, other than gasoline, for consumption in the Areas.

    c. If Egyptian gasoline standards will comply with the conditions
       of sub-para (a) above, the importation of Egyptian gasoline
       will also be allowed.

13. In addition to the points of exit and entry designated according
    to the Article regarding Passages in Annex I of the Agreement for
    the purpose of export and import of goods, the Palestinian side
    has the right to use all points of exit and entry in Israel
    designated for that purpose. The import and export of the
    Palestinians through the points of exit and entry in Israel will
    be given equal trade and economic treatment.

14. In the entry points of the Jordan River and the Gaza Strip:

    a. Freight shipment

       The Palestinian Authority will have full responsibility and
       powers in the Palestinian customs points (freight-area) for
       the implementation of the agreed upon customs and importation
       policy as specified in this protocol, including the inspection
       and the collection of taxes and other charges, when due.

       Israeli customs officials will be present and will receive
       from the Palestinian customs officials a copy of the necessary
       relevant documents related to the specific shipment and will
       be entitled to ask for inspection in their presence of both
       goods and tax collection.

       The Palestinian customs officials will be responsible for the
       handling of the customs procedure including the inspection and
       collection of due taxes.

       In case of disagreement on the clearance of any shipment
       according to this Article, the shipment will be delayed for
       inspection for a maximum period of 48 hours during which a
       joint sub-committee will resolve the issue on the basis of the
       relevant provisions of this Article. The shipment will be
       released only upon the sub-committee's decision.

    b. Passengers customs lane

       Each side will administer its own passengers customs
       procedures, including inspection and tax collection. The
       inspection and collection of taxes due in the Palestinian
       customs lane will be conducted by customs officials of the
       Palestinian Authority.

       Israeli customs officials will be invisibly present in the
       Palestinian customs lane and entitled to request inspection of
       goods and collection of taxes when due. In the case of
       suspicion, the inspection will be carried out by the
       Palestinian official in a separate room in the presence of the
       Israeli customs official.

15. The clearance of revenues from all import taxes and levies,
    between Israel and the Palestinian Authority, will be based on
    the principle of the place of final destination. In addition,
    these tax revenues will be allocated to the Palestinian Authority
    even if the importation was carried out by Israeli importers when
    the final destination explicitly stated in the import
    documentation is a corporation registered by the Palestinian
    Authority and conducting business activity in the Areas. This
    revenue clearance will be effected within six working days from
    the day of collection of the said taxes and levies.

16. The Joint Economic Committee or a sub-committee established by it
    for the purposes of this Article will deal inter alia with the
    following:

    1) Palestinian proposals for addition of items to Lists A1, A2
       and B. Proposals for changes in rates and in import
       procedures, classification, standards and licensing
       requirements for all other imports,

    2) Estimate the Palestinian market needs, as mentioned in para 3
       above;

    3) Receive notifications of changes and conduct consultations, as
       mentioned in para 6 above;

    4) Agree upon the rules of origin as mentioned in para 8 above,
       and review their implementation;

    5) Co-ordinate the exchange of information relevant to licensing
       matters as mentioned in para 9 above.

    6) Discuss and review any other matters concerning the
       implementation of this Article and resolve problems arising
       therefrom.

17. The Palestinian Authority will have the right to exempt the
    Palestinian returnees who will be granted permanent residency in
    the Areas from import taxes on personal belongings including
    house appliances and passenger cars as long as they are for
    personal use.

18. The Palestinian Authority will develop its system for temporary
    entry of needed machines and vehicles used for the Palestinian
    Authority and the Palestinian economic development plan.

    Concerning other machines and equipment, not included in Lists
    A1, A2 and B, the temporary entry will be part of the import
    policy as agreed in para 10 above, until the joint sub-committee
    mentioned in para 16 decides upon a new system proposed by the
    Palestinian Authority. The temporary entry will be coordinated
    through the joint sub-committee.

19. Donations in kind to the Palestinian Authority will be exempted
    from customs and other import taxes if destined and used for
    defined development projects or non-commercial humanitarian
    purposes.
    The Palestinian Authority will be responsible exclusively for
    planning and management of the donors' assistance to the
    Palestinian people. The Joint Economic Committee will discuss
    issues pertaining to the relations between the provisions in this
    Article and the implementation of the principles in the above
    paragraph.

                             Article IV

                    MONETARY AND FINANCIAL ISSUES

1.  The Palestinian Authority will establish a Monetary Authority
    (PMA) in the Areas.
    The PMA will have the powers and responsibilities for the
    regulation and implementation of the monetary policies within the
    functions described in this Article.

2.  The PMA will act as the Palestinian Authority's official economic
    and financial advisor.

3.  The PMA will act as the Palestinian Authority's and the public
    sector entities' sole financial agent, locally and
    internationally.

4.  The foreign currency reserves (including gold) of the Palestinian
    Authority and all Palestinian public sector entities will be
    deposited solely with the PMA and managed by it.

5.  The PMA will act as the lender of last resort for the banking
    system in the Areas.

6.  The PMA will authorize foreign exchange dealers in the Areas and
    will exercise control (regulation and supervision) over foreign
    exchange transactions within the Areas and with the rest of the
    world.

7.  a. The PMA will have a banking supervision department that will
       be responsible for the proper functioning, stability, solvency
       and liquidity of the banks operating in the Areas.

    b. The banking supervision department will predicate its
       supervision on the international principles and standards
       reflected in international conventions and especially on the
       principles of the "Basle Committee".

    c. The supervision department will be charged with the general
       supervision of every such bank, including:
       -The regulation of all kinds of banking activities, including
       their foreign activities;
       -The licensing of banks formed locally and of branches,
       subsidiaries, joint ventures and representative offices of
       foreign banks and the approval of controlling shareholders;
       -The supervision and inspection of banks.

8.  The PMA will relicense each of the five branches of the Israeli
    banks operating at present in the Gaza Strip and the West Bank,
    as soon as its location or the authorities regarding it come
    under the jurisdiction of the Palestinian Authority. These
    branches will be required to comply with the general rules and
    regulations of the PMA concerning foreign banks, based on the
    "Basle Concordat". Para I0 d, e, and f below will apply to these
    branches.

9.  a. Any other Israeli bank wishing to open a branch or a
       subsidiary in the Areas will apply for a license to the PMA
       and will be treated equally to other foreign banks, provided
       that the same will apply to the Palestinian banks wishing to
       open a branch or a subsidiary in Israel.

    b. Granting of a license by both authorities will be subject to
       the following arrangements based on the "Basle Concordat"
       valid on the date of signing of the Agreement and to the host
       authority's prevailing general rules and regulations
       concerning opening of branches and subsidiaries of foreign
       banks.

       In this para 10 "host authority" and "home authority" apply
       only to the Bank of Israel (BOI) and the PMA.

    c. A bank wishing to open a branch or establish a subsidiary will
       apply to the host authority, having first obtained the
       approval of its home authority. The host authority will notify
       the home authority of the terms of the license, and will give
       its final approval unless the home authority objects.

    d. The home authority will be responsible for the consolidated
       and comprehensive supervision of banks, inclusive of branches
       and subsidiaries in the area under the jurisdiction of the
       host authority. However, the distribution of supervision
       responsibilities between the home and the host authorities
       concerning subsidiaries will be according to the "Basle
       Concordat".

    e. The host authority will regularly examine the activities of
       branches and subsidiaries in the area under its jurisdiction.
       The home authority will have the right to conduct on site
       examinations in the branches and subsidiaries in the host
       area. However, the supervision responsibilities of the home
       authority concerning subsidiaries will be according to the
       "Basle Concordat".
       Accordingly, each authority will transfer to the other
       authority copies of its examination reports and any
       information relevant to the solvency, stability and soundness
       of the banks, their branches and subsidiaries.

    f. The BOI and the PMA will establish a mechanism for cooperation
       and for the exchange of information on issues of mutual
       interest.

10. a. The New Israeli Sheqel (NIS) will be one of the circulating
       currencies in the Areas and will legally serve there as means
       of payment for all purposes including official transactions.
       Any circulating currency, including the NIS, will be accepted
       by the Palestinian Authority and by all its institutions,
       local authorities and banks, when offered as a means of
       payment for any transaction.

    b. Both sides will continue to discuss, through the JEC, the
       possibility of introducing mutually agreed Palestinian
       currency or temporary alternative currency arrangements for
       the Palestinian Authority.

11. a. The liquidity requirements on all deposits in banks operating
       in the Areas will be determined and announced by the PMA.

    b. Banks in the Areas will accept NIS deposits. The liquidity
       requirements on the various kinds of NIS deposits (or deposit
       linked to the NIS) in banks operating in the Areas will not be
       less than 4% to 8%, according to the type of deposits. Changes
       of over 1% in the liquidity requirements on NIS deposits (or
       deposits linked to the NIS) in Israel will call for
       corresponding changes in the above mentioned rates.

    c. The supervision and inspection of the implementation of all
       liquidity requirements will be carried out by the PMA.

    d. The reserves and the liquid assets required according to this
       paragraph will be deposited at the PMA according to rules and
       regulations determined by it. Penalties for non compliance
       with the liquidity requirements will be determined by the PMA.

12. The PMA will regulate and administer a discount window system and
    the supply of temporary finance for banks operating in the Areas.

13. a. The PMA will establish or license a clearing house in order to
       clear money orders between the banks operating in the Areas,
       and with other clearing houses.

    b. The clearing of money orders and transactions between banks
       operating in the Areas and banks operating in Israel will be
       done between the Israeli and the Palestinian clearing houses
       on same working day basis, according to agreed arrangements.

14. Both sides will allow correspondential relations between each
    others' banks.

15. The PMA will have the right to convert at the BOI excess NIS
    received from banks operating in the Areas into foreign currency,
    in which the BOI trades in the domestic inter-bank market, up to
    the amounts determined per period, according to the arrangements
    detailed in para 16 below.

16. a. The excess amount of NIS, due to balance of payments flows,
       that the PMA will have the right to convert into foreign
       currency, will be equal to:

       (1) Estimates of all Israeli "imports" of goods and services
           from the Areas, valued at market prices (inclusive of
           taxes), which were paid for in NIS, less:
           (i) the taxes collected by the Palestinian Authority on
           all Israeli "imports" from the Areas and rebated to Israel
           in NIS, and
           (ii) the taxes collected by Israel on all Israeli
           "imports" from the Areas and included in their market
           value, and not rebated to the Palestinian Authority,
       minus
       (2) Estimates of all Israeli "exports" of goods and services
           to the Areas, valued at market prices (inclusive of
           taxes), which were paid for in NIS, less:
           (i) the taxes collected by Israel on such "exports" and
           rebated to the Palestinian Authority, and
           (ii) the taxes collected by the Palestinian Authority on
           such "exports" and included in their market value, and not
           rebated to Israel;
       plus

       (3) The accumulated net amounts of foreign currency converted
           previously into NIS by the PMA, as recorded in the BOI
           Dealing Room.

    b. The said flows and amounts will be calculated as of the date
       of the signing of the Agreement.

Notes to para 16:

       (i) The estimates of the said "exports and imports" of goods
           and services will include inter alia labor services, NIS
           expenditure of tourists and Israelis in the Areas and NIS
           expenditure of Palestinians of the Areas in Israel.

       (ii) Taxes and pension contributions on "imports" of labor
            services, paid to "importing" side and rebated to the
            "exporting" one, will not be included in the estimates of
            the sums to be converted, as the "exports'" earnings of
            labor services are recorded in the statistics inclusive
            of them, although they do not accrue to the individuals
            supplying them.

17. The PMA and the BOI will meet annually to discuss and determine
    the annual amount of convertible NIS during the following
    calendar year and will meet semi-annually to adjust the said
    amount. The amounts determined annually and adjusted
    semi-annually will be based on data and estimates regarding the
    past and on forecasts for the following period, according to the
    formula mentioned in para 16. The first meeting will be as soon
    as possible within three months after the date of the signing of
    the Agreement.

18. a. The exchange of foreign currency for NIS and vice-versa by the
       PMA will be carried out through the BOI Dealing Room, at the
       market exchange rates.

    b. The BOI will not be obliged to convert in any single month
       more than 1/5 of the semi-annual amount, as mentioned in para
       17.

19. There will be no ceiling on the annual foreign currency
    conversions by the PMA into NIS. However, in order to avoid
    undesirable fluctuations in the foreign exchange market, monthly
    ceilings of such conversions will be agreed upon in the annual
    and semi-annual meetings referred to in para 17.

20. Banks in the Areas will convert NIS into other circulating
    currencies and vice-versa.

21. The Palestinian Authority will have the authorities, powers and
    responsibilities regarding the regulation and supervision of
    capital activities in the Areas, including the licensing of
    capital market institutions, finance companies and investment
    funds.

                             Article  V

                           DIRECT TAXATION

1.  Israel and the Palestinian Authority will each determine and
    regulate independently its own tax policy in matters of direct
    taxation, including income tax on individuals and corporations,
    property taxes, municipal taxes and fees.

2.  Each tax administration will have the right to levy the direct
    taxes generated by economic activities within its area.

3.  Each tax administration may impose additional taxes on residents
    within its area on (individuals and corporations) who conduct
    economic activities in the other side's area.

4.  Israel will transfer to the Palestinian Authority a sum equal to:

    a. 75% of the income taxes collected from Palestinians from the
       Gaza Strip and the Jericho Area employed in Israel.

    b. The full amount of income taxes collected from Palestinians
       from the Gaza Strip and Jericho Area employed in the
       settlements.

5.  The two sides will agree on a set of procedures that will address
    all issues concerning double taxation.

                             Article VI

                 INDIRECT TAXES ON LOCAL PRODUCTION

1.  The Israel and the Palestinian tax administrations will levy and
    collect VAT and purchase taxes on local production, as well as
    any other indirect taxes, in their respective areas.

2.  The purchase tax rates within the jurisdiction of each tax
    administration will be identical as regards locally produced and
    imported goods.

3.  The present Israeli VAT rate is 17%. The Palestinian VAT rate
    will be 15% to 16%.

4.  The Palestinian Authority will decide on the maximum annual
    turnover for businesses under its jurisdiction to be exempt from
    VAT, within an upper limit of 12,000 US $.

5.  The VAT on purchases by businesses registered for VAT purposes
    will accrue to the tax administration with which the respective
    business is registered.

    Businesses will register for VAT purposes with the tax
    administration of the side of their residence, or on the side of
    their ongoing operation.

    There will be clearance of VAT revenues between the Israeli and
    Palestinian VAT administrations on the following conditions:

    a. The VAT clearance will apply to VAT on transactions between
       businesses registered with the VAT administration of the side
       in which they reside.

    b. The following procedures will apply to clearance of VAT
       revenues accruing from transactions by businesses registered
       for VAT purposes:

       (1) To be acceptable for clearance purposes, special invoices,
           clearly marked for this purpose, will be used for
           transactions between businesses registered with the
           different sides.

       (2) The invoices will be worded either in both Hebrew and
           Arabic or in English and will be filled out in any of
           these three languages, provided that the figures are
           written in "Arabic" (not Hindi) numerals.

       (3) For the purpose of tax rebates, such invoices will be
           valid for six months from their date of issue.

       (4) Representatives of the two sides will meet once a month,
           on the 20th day of the month, to present each other with a
           list of invoices submitted to them for tax rebate, for VAT
           clearance. This list will include the following details
           regarding each invoice:
           (a) The number of the registered business issuing it;
           (b) The name of the registered business issuing it;
           (c) The number of the invoice;
           (d) The date of issue;
           (e) The amount of the invoice;
           (f) The name of the recipient of the invoice.

       (5) The clearance claims will be settled within 6 days from
           the meeting, through a payment by the side with the net
           balance of claims against it, to the other side.

       (6) Each side will provide the other side, upon demand, with
           invoices for verification purposes. Each tax
           administration will be responsible for providing invoices
           for verification purposes for 6 months after receiving
           them.

       (7) Each side will take the necessary measure to verify the
           authenticity of the invoices presented to it for clearance
           by the other side.

       (8) Claims for VAT clearance which will not be found valid
           will be deducted from the next clearance payment.

       (9) Once an inter-connected computer system for tax rebates to
           businesses and for VAT clearance between the two sides is
           operational, it will replace the clearance procedures
           specified in sub-paras (4) – (8).

       (10) The two tax administrations will exchange lists of the
           businesses registered with them and will provide each
           other with the necessary documentation, if required, for
           the verification of transactions.

       (11) The two sides will establish a sub-committee which will
           deal with the implementation arrangements regarding the
           clearance of VAT revenues set above.

6.  VAT paid by not-for-profit Palestinian organizations and
    institutions, registered by the Palestinian Authority, on
    transactions in Israel, will accrue to the Palestinian tax
    administration. The clearance system set out in para 5 will apply
    to these organizations and institutions.

                             Article VII

                                LABOR

1.  Both sides will attempt to maintain the normality of movement of
    labor between them, subject to each side's right to determine
    from time to time the extent and conditions of the labor movement
    into its area. If the normal movement is suspended temporarily by
    either side, it will give the other side immediate notification,
    and the other side may request that the matter be discussed in
    the Joint Economic Committee.

    The placement and employment of workers from one side in the area
    of the other side will be through the employment service of the
    other side and in accordance with the other sides' legislation.
    The Palestinian side has the right to regulate the employment of
    Palestinian labor in Israel through the Palestinian employment
    service, and the Israeli Employment Service will cooperate and
    coordinate in this regard.

2.  a. Palestinians employed in Israel will be insured in the Israeli
       social insurance system according to the National Insurance
       Law for employment injuries that occur in Israel, bankruptcy
       of employers and maternity leave allowance.

    b. The National Insurance fees deducted from the wages for
       maternity insurance will be reduced according to the reduced
       scope of maternity insurance, and the equalization deductions
       transferred to the Palestinian Authority, if levied, will be
       increased accordingly.

    c. Implementation procedures relating thereto will be agreed upon
       between the Israeli National Insurance Institute and the
       Palestinian Authority or the appropriate Palestinian social
       insurance institution.

3.  a. Israel will transfer to the Palestinian Authority, on a
       monthly basis, the equalization deductions as defined by
       Israeli legislation, if imposed and to the extent levied by
       Israel. The sums so transferred will be used for social
       benefits and health services, decided upon by the Palestinian
       Authority, for Palestinians employed in Israel and for their
       families.

       The equalization deductions to be so transferred will be those
       collected after the date of the signing of the Agreement from
       wages of Palestinians employed in Israel and from their
       employers.

       These sums will not include

       (1) Payments for health services in places of employment.

       (2) 2/3 of the actual administrative costs in handling the
           matters related to the Palestinians employed in Israel by
           the Payments Section of the Israeli Employment Service.

4.  Israel will transfer, on a monthly basis, to a relevant pension
    insurance institution to be established by the Palestinian
    Authority, pension insurance deductions collected after the
    establishment of the above institution and the completion of the
    documents mentioned in para 6.

    These deductions will be collected from wages of Palestinians
    employed in Israel and their employers, according to the relevant
    rates set out in the applicable Israeli collective agreements.
    2/3 of the actual administrative costs in handling these
    deductions by the Israeli Employment Service will be deducted
    from the sums transferred. The sums so transferred will be used
    for providing pension insurance for these workers. Israel will
    continue to be liable for pension rights of the Palestinian
    employees in Israel, to the extent accumulated by Israel before
    the entry into force of this para 4.

5.  Upon the receipt of the deductions, the Palestinian Authority and
    its relevant social institutions will assume full responsibility
    in accordance with the Palestinian legislation and arrangements,
    for pension rights and other social benefits of Palestinians
    employed in Israel, that accrue from the transferred deductions
    related to these rights and benefits. Consequently, Israel and
    its relevant social institutions and the Israeli employers will
    be released from, and will not be held liable for any obligations
    and responsibilities concerning personal claims, rights and
    benefits arising from these transferred deductions, or from the
    provisions of paras 2-4 above.

6.  Prior to the said transfers, the Palestinian Authority or its
    relevant institutions, as the case may be, will provide Israel
    with the documents required to give legal effect to their
    aforesaid obligations, including mutually agreed implementation
    procedures of the principles agreed upon in paras 3-5 above.

7.  The above arrangements concerning equalization deductions and/or
    pension deductions may be reviewed and changed by Israel if an
    authorized court in Israel will determine that the deductions or
    any part thereof must be paid to individuals, or used for
    individual social benefits or insurance in Israel, or that it is
    otherwise unlawful. In such a case the liability of the
    Palestinian side will not exceed the actual transferred
    deductions related to the case.

8.  Israel will respect any agreement reached between the Palestinian
    Authority, or an organization or trade-union representing the
    Palestinians employed in Israel, and a representative
    organization of employees or employers in Israel, concerning
    contributions to such organization according to any collective
    agreement.

9.  a. The Palestinian Authority may integrate the existing health
       insurance scheme for Palestinians employed in Israel and their
       families in its health insurance services. As long as this
       scheme continues, whether integrated or separately, Israel
       will deduct from their wages the health insurance fees
       ("health stamp") and will transfer them to the Palestinian
       Authority for this purpose.

    b. The Palestinian Authority may integrate the existing health
       insurance scheme for Palestinians who were employed in Israel
       and are receiving pension payments through the Israeli
       Employment Service, in its health insurance services. As long
       as this scheme continues, whether integrated or separately,
       Israel will deduct the necessary sum of health insurance fees
       ("health stamp") from the equalization payments and will
       transfer them to the Palestinian Authority for this purpose.

10. The JEC will meet upon the request of either side and review the
    implementation of this Article and other issues concerning labor,
    social insurance and social rights.

11. Other deductions not mentioned above, if any, will be jointly
    reviewed by the JEC. Any agreement between the two sides
    concerning these deductions will be in addition to the above
    provisions.

12. Palestinians employed in Israel will have the right to bring
    disputes arising out of employee – employer relationships and
    other issues before the Israeli Labor Courts, within these
    courts' jurisdiction.

13. This Article governs the future labor relations between the two
    sides and will not impair any labor rights prior to the date of
    signing of the Agreement.

                            Article VIII

                             AGRICULTURE

1.  There will be free movement of agricultural produce, free of
    customs and import taxes, between the two sides, subject to the
    following exceptions and arrangements.

2.  The official veterinary and plant protection services of each
    side will be responsible, within the limits of their respective
    jurisdiction, for controlling animal health, animal products and
    biological products, and plants and parts thereof, as well as
    their importation and exportation.

3.  The relations between the official veterinary and plant
    protection services of both sides will be based on mutuality in
    accordance with the following principles, which will be applied
    in all the areas under their respective jurisdiction:

    a. Israel and the Palestinian Authority will do their utmost to
       preserve and improve the veterinary standards.

    b. Israel and the Palestinian Authority will take all measures to
       reach equivalent and compatible standards regarding animal
       disease control, including mass vaccination of animals and
       avians, quarantines, "stamping out" measures and residue
       control standards.

    c. Mutual arrangements will be made to prevent the introduction
       and spread of plant pests and diseases, for their eradication
       and concerning residue control standards in plant products.

    d. The official veterinary and plant protection services of
       Israel and the Palestinian Authority will co-ordinate and
       regularly exchange information regarding animal diseases, as
       well as plant pests and diseases, and will establish a
       mechanism for immediate notification of the outbreak of such
       diseases.

4.  Trade between the two sides in animals, animal products and
    biological products will be in keeping with the principles and
    definitions set out in the current edition of the OIE National
    Animal Health Code as updated from time to time (hereinafter –
    I.A.H.C.)

5.  Transit of livestock, animal products and biological products
    from one side through the area under the jurisdiction of the
    other side, should be conducted in a manner aimed at the
    prevention of diseases spreading to or from the consignment
    during its movement. For such a transit to be permitted, it is a
    prerequisite that the veterinary conditions agreed upon by both
    sides will be met in regard to importation of animals, their
    products and biological products from external markets. Therefore
    the parties agree to the following arrangements.

6.  The official veterinary services of each side have the authority
    to issue veterinary import permits for import of animals, animal
    products and biological products to the areas under its
    jurisdiction. In order to prevent the introduction of animal
    diseases from third parties, the following procedures will be
    adopted:

    a. The import permits will strictly follow the professional
       veterinary conditions for similar imports to Israel as
       prevailing at the time of their issuance. The permits will
       specify the country of origin and the required conditions to
       be included in the official veterinary certificates which
       should be issued by the veterinary authorities in the
       countries of origin and which should accompany each
       consignment.

       Each side may propose a change in these conditions. The change
       will come into force 10 days after notice to the other side,
       unless the other side requested that the matter be brought
       before the Veterinary Sub-Committee specified in para 14
       (hereinafter – VSC). If it is more stringent than the
       prevailing conditions – it will come into force 20 days after
       the request, unless both sides decide otherwise through the
       VSC, and if more lenient – it will come into force only if
       agreed upon by both sides through the VSC.
       However, if the change is urgent and needed for the protection
       of animal and public health, it will come into force
       immediately after notice by the other side and will remain in
       force unless and until both sides agree otherwise through the
       VSC.

    b. The official veterinary certificates will include the
       provisions regarding OIE Lists A & B Diseases as specified in
       the I.A.H.C. When the I.A.H.C. allows alternative requirements
       regarding the same disease, the most stringent one will be
       adopted unless otherwise agreed upon by the VSC.

    c. When infectious diseases which are not included in Lists A & B
       of the I.A.H.C. exist or are suspected, on scientific grounds,
       to exist in the exporting country, the necessary veterinary
       import conditions that will be required and included in the
       official veterinary certificates, will be discussed in the
       VSC, and in the case of different professional opinions, the
       most stringent ones will be adopted.

    d. The import of live vaccines will be permitted only if so
       decided by the VSC.

    e. Both sides will exchange, through the VSC, information
       pertaining to import licensing, including the evaluation of
       the disease situation and zoosanitary capability of exporting
       countries, which will be based upon official information as
       well as upon other available data.

    f. Consignments which do not conform with the above mentioned
       requirements will not be permitted to enter the areas under
       the jurisdiction of either side.

7.  Transportation of livestock and poultry and of animal products
    and biological products between areas under the jurisdiction of
    one side through areas under the jurisdiction of the other side,
    will be subject to the following technical rules:

    a. The transportation will be by vehicles which will be sealed
       with a seal of the official veterinary services of the place
       of origin and marked with a visible sign "Animal
       Transportation" or "Products of Animal Origin" in Arabic and
       Hebrew, in coloured and clearly visible letters on white
       background.;

    b. Each consignment will be accompanied by a veterinary
       certificate issued by the official veterinary services of the
       place of origin, certifying that the animals or their products
       were examined and are free of infectious diseases and
       originate from a place which is not under quarantine or under
       animal movement restrictions.

8.  Transportation of livestock and poultry, animal products and
    biological products destined for Israel from the Areas and vice
    versa will be subject to veterinary permits issued by the
    official veterinary services of the recipient side, in keeping
    with the OIE standards used in international traffic in this
    field. Each such consignment will be transported by a suitable
    and marked vehicle, accompanied by a veterinary certificate in
    the form agreed upon between the official veterinary services of
    both sides. Such certificates will be issued only if permits of
    the recipient side are presented.

9.  In order to prevent the introduction of plant pests and diseases
    to the region, the following procedures will be adopted :

    a. The transportation between the Areas and Israel, of plants and
       parts thereof (including fruits and vegetables), the control
       of pesticide residues in them and the transportation of plant
       propagation material and of animal feed, may be inspected
       without delay or damage by the plant protection services of
       the recipient side.

    b. The transportation between the Areas through Israel of plants
       and parts thereof (including fruits and vegetables) as well as
       of pesticides, may be required to pass a phytosanitary
       inspection without delay or damage.

    c. The official Palestinian plant protection services have the
       authority to issue permits for the import of plants and parts
       thereof as well as of pesticides from external markets. The
       permits will be based on the prevailing standards and
       requirements.

       The permits will specify the required conditions to be
       included in the official Phytosanitary Certificates (hence
       P.C.) based upon the standards and the requirements of the
       International Plant Protection Convention (I.P.P.C.)and those
       of the European and Mediterranean Plant Protection
       Organization (E.P.P.O.) which should accompany each
       consignment.
       The P.C.'s will be issued by the plant protection services in
       the countries of origin. Dubious or controversial cases will
       be brought before the sub-committee on plant protection.

10. The agricultural produce of both sides will have free and
    unrestricted access to each others' markets, with the temporary
    exception of sales from one side to the other side of the
    following items only: poultry, eggs, potatoes, cucumbers,
    tomatoes and melons. The temporary restrictions on these items
    will be gradually removed on an increasing scale until they are
    finally eliminated by 1998, as listed below:

Year     Poultry   Eggs   Potatoes   Cucumbers   Tomatoes    Melons
——————————————————————–
         (In tons)  (In   (In tons)   (In tons)  (In tons)  (In tons)
                  millions)

1994       5,000     30    10,000     10,000      13,000     10,000

1995       6,000     40    13,000     13,000      16,000     13,000

1996       7,000     50    15,000     15,000      19,000     15,000

1997       8,000     60    17,000     17,000      22,000     17,000

1998   unlimited unlimited unlimited  unlimited  unlimited  unlimited
———————————————————————

Note:  The above figures refer to the combined quantities marketed
       from the West Bank and Gaza Strip to Israel and vice-versa.
       The Palestinian Authority will notify Israel the apportioning
       of these quantities between these areas concerning the
       quantities pertaining to the Palestinian produce.

11. The Palestinians will have the right to export their agricultural
    produce to external markets without restrictions, on the basis of
    certificates of origin issued by the Palestinian Authority.

12. Without prejudice to obligations arising out of existing
    international agreements, the two sides will refrain from
    importing agricultural products from third parties which may
    adversely affect the interests of each other's farmers.

13. Each side will take the necessary measures in the area under its
    jurisdiction to prevent damage which may be caused by its
    agriculture to the environment of the other side.

14. The two sides will establish sub-committees of their respective
    official veterinary and plant protection services, which will
    update the information and review issues, policies and procedures
    in these fields. Any changes in the provisions of this Article
    will be agreed upon by both sides.

15. The two sides will establish a sub-committee of experts in the
    dairy sector in order to exchange information, discuss and
    coordinate their production in this sector so as to protect the
    interests of both sides. In principle, each side will produce
    according to its domestic consumption.

                             Article IX

                              INDUSTRY

1.  There will be free movement of industrial goods free of any
    restrictions including customs and import taxes between the two
    sides, subject to each side's legislation.

2.  a. The Palestinian side has the right to employ various methods
       in encouraging and promoting the development of the
       Palestinian industry by way of providing grants, loans,
       research and development assistance and direct-tax benefits.
       The Palestinian side has also the right to employ other
       methods of encouraging industry resorted to in Israel.

    b. Both sides will exchange information about the methods
       employed by them in the encouragement of their respective
       industries.

    c. Indirect tax rebates or benefits and other subsidies to sales
       shall not be allowed in trade between the two sides.

3.  Each side will do its best to avoid damage to the industry of the
    other side and will take into consideration the concerns of the
    other side in its industrial policy.

4.  Both sides will cooperate in the prevention of deceptive
    practices, trade in goods which may endanger health, safety and
    the environment and in goods of expired validity.

5.  Each side will take the necessary measures in the area under its
    jurisdiction to prevent damage which may be caused by its
    industry to the environment of the other side.

6.  The Palestinians will have the right to export their industrial
    produce to external markets without restrictions, on the basis of
    certificates of origin issued by the Palestinian Authority.

7.  The JEC will meet and review issues pertaining to this Article.

                              Article X

                               TOURISM

1.  The Palestinian Authority will establish a Palestinian Tourism
    Authority which will exercise, inter alia, the following powers
    in the Areas.

    a. Regulating, licensing, classifying and supervising tourist
       services, sites and industries.

    b. Promoting foreign and domestic tourism and developing the
       Palestinian tourist resources and sites.

    c. Supervising the marketing, promotion and information
       activities related to foreign and domestic tourism .

2.  Each side shall, under its respective jurisdiction, protect,
    guard and ensure the maintenance and good upkeep of historical,
    archaeological, cultural and religious sites and all other
    tourist sites, to fit their status as well as their purpose as a
    destination for visitors.

3.  Each side will determine reasonable visiting hours and days for
    all tourist sites in order to facilitate visits at a wide variety
    of days and hours, taking into consideration religious and
    national holidays. Each side shall publicize such opening times.
    Meaningful changes in the opening times will take into
    consideration tourist programs already committed to.

4.  Tourist buses or any other form of tourist transport authorized
    by either side, and operated by companies registered and licensed
    by it, will be allowed to enter and proceed on their tour within
    the area under the jurisdiction of the other side, provided that
    such buses or other vehicles conform with the EEC technical
    specifications [I. currently adopted.] All such vehicles will be
    clearly marked as tourist vehicles.

5.  Each side will protect the environment and the ecology around the
    tourist sites under its jurisdiction. In view of the importance
    of beaches and maritime activities for tourism, each side will do
    its best efforts to ensure that development and construction on
    the Mediterranean coast, and especially at ports (such as
    Ashqelon or Gaza), will be planned and carried out in a manner
    that will not adversely affect the ecology, environment or the
    functions of the coastline and beaches of the other side.

6.  Tourism companies and agencies licensed by either side shall
    enjoy equal access to tourism – related facilities and amenities
    in border points of exit and entry according to the regulations
    of the authority operating them.

7.  a. Each side will license, according to its own rules and
       regulations, travel agents, tour companies, tour guides and
       other tourism businesses (hereinafter – tourism entities)
       within its jurisdiction.

    b. Tourism entities authorized by either side, will be allowed to
       conduct tours that include the area under the jurisdiction of
       the other side, provided that their authorization as well as
       their operation will be in accordance with rules, professional
       requirements and standards agreed upon by both sides in the
       sub-committee mentioned in para 9.

       Pending that agreement, existing tourism entities in the Areas
       which are currently allowed to conduct tours that include
       Israel, will be allowed to continue to do so, and Israeli
       authorized tourism entities will continue to be allowed to
       conduct tours that include the Areas.

       In addition, any tourism entity of one side that the tourism
       authorities of the other side will certify as fulfilling all
       its rules, professional requirements and standards, will be
       allowed to conduct tours that include that other side.

8.  Each side will make its own arrangement for compensation of
    tourists for bodily injury and property damages caused by
    political violence in the areas under its respective
    jurisdiction.

9.  The JEC or a tourism sub-committee established by it shall meet
    upon the request of either side in order to discuss the
    implementation of the provisions of this Article and resolve
    problems that may arise. The sub-committee will also discuss and
    consider tourist issues of benefit to both sides, and will
    promote educational programs for tourism entities of both sides
    in order to further their professional standards and their
    ethics. Complaints of one side against the behaviour of tourism
    entities of the other side will be channelled through the
    committee.

Note:  It is agreed that the final wording in the last sentence in
       para 4 will be adopted according to the final wording in the
       relevant provisions of the Agreement.

                             Article XI

                          INSURANCE ISSUES

1.  The authorities, powers and responsibilities in the insurance
    sphere in the Areas, including inter alia the licensing of
    insurers, insurance agents and the supervision of their
    activities, will be transferred to the Palestinian Authority.

2.  a. The Palestinian Authority will maintain a compulsory absolute
       liability system for road accident victims with a ceiling on
       the amount of compensation based upon the following
       principles:

       (1) Absolute liability for death or bodily injury to road
           accident victims, it being immaterial whether or not there
           was fault on the part of the driver and whether or not
           there was fault or contributory fault on the part of
           others, each driver being responsible for persons
           travelling in his vehicle and for pedestrians hit by his
           vehicle.

       (2) Compulsory insurance for all motor vehicles, covering
           death or bodily injury to all road accident victims,
           including drivers.

       (3) No cause of action in tort for death or bodily injury
           resulting from road accidents.

       (4) The maintenance of a statutory fund (hereinafter – the
           Fund) for compensation of road accident victims who are
           unable to claim compensation from an insurer for the
           following reasons:
           (i) the driver liable for compensation is unknown;
           (ii) the driver is not insured or his insurance does not
           cover the liability involved; or
           (iii) the insurer is unable to meet his liabilities.

    b. Terms in this Article will have the same meaning as in the
       legislation prevailing at the date of signing of the Agreement
       concerning compulsory motor vehicle insurance and compensation
       of road accident victims.

    c. Any change by either side in the rules and regulations
       regarding the implementation of the above mentioned principles
       will require prior notice to the other side. A change which
       might substantially affect the other side will require prior
       notice of at least three months.

3.  a. Upon the signing of the Agreement the Palestinian Authority
       will establish a Fund for the Areas (hereinafter – the
       Palestinian Fund) for the purposes detailed in para 2(a)(4)
       above and for the purposes detailed below. The Palestinian
       Fund will assume the responsibilities of the statutory Road
       Accident Victims Compensation Fund in the West Bank and the
       Gaza Strip (hereinafter – the Existing Fund) regarding the
       Areas, according to the prevailing law at that time.
       Accordingly, the Existing Fund will cease to be responsible
       for any liability regarding accidents occurring in the Areas
       from the date of signing of the Agreement.

    b. The Existing Fund will transfer to the Palestinian Fund, after
       the assumption of the above mentioned responsibilities by it,
       the premiums paid to the Existing Fund by the insurers for
       vehicles registered in the Areas, pro-rata to the unexpired
       period of each insurance policy.

    4. a. Compulsory motor vehicle insurance policies issued by
       insurers licensed by either side will be valid in the
       territories of both sides. Accordingly, a vehicle registered
       in one side covered by such a policy will not be required to
       have an additional insurance coverage for travel in the areas
       under the other side's jurisdiction. These insurance policies
       will cover all the liabilities according to the legislation of
       the place of the accident.

    b. In order to cover part of the liabilities which may incur due
       to road accidents in Israel by uninsured vehicles registered
       in the Palestinian Authority, the Palestinian Fund will
       transfer to the Israeli Fund, on a monthly basis, for each
       insured vehicle, an amount equal to 30% of the amount paid to
       the Israeli Fund by an insurer registered in Israel, for the
       sat-ne type of vehicle, for the same period of insurance
       (which will not be less than 90 days).

5.  In cases where a victim of a road accident wishes to claim
    compensation from an insurer registered by the other side or from
    the Fund of the other side or in cases where a driver or an owner
    of a car is sued by a victim, by an insurer or by the Fund of the
    other side, he may nominate the Fund of his side as his proxy for
    this purpose. The Fund so nominated may address any relevant
    party from the other side directly or through the other sides'
    Fund.

6.  In the case of a road accident in which neither the registration
    number of the vehicle nor the identity of the driver are known,
    the Fund of the side which has jurisdiction over the place of the
    accident will compensate the victim, according to its own
    legislation.

7.  The Fund of each side will be responsible towards the victims of
    the other side for any liability of the insurers of its side
    regarding the compulsory insurance and will guarantee their
    liabilities.

8.  Each side will guarantee its Fund's liabilities according to this
    Article.

9.  The two sides will negotiate within three months from the date of
    the signing of the Agreement a cut-off agreement between the
    Existing Fund and the Palestinian Fund concerning accidents which
    occurred in the Areas prior to the date of the signing of the
    Agreement, whether claims have been reported or not. The cut-off
    agreement will not include compensation for Israeli victims
    involved in accidents which occurred in the Areas prior to the
    date of the signing of the Agreement.

10. a. The two sides will establish immediately upon the signing of
       the Agreement, a sub-committee of experts (hereinafter – the
       Sub-Committee) which will deal with issues regarding the
       implementation of this Article, including:

       (1) Procedures concerning the handling of claims of victims of
           the one side from insurers or from the Fund of the other
           side;

       (2) Procedures concerning the transfer of the amounts between
           the Funds of both sides as mentioned in para 4(b) above-,

       (3) The details of the cut-off agreement between the Existing
           Fund and the Palestinian Fund, as set out in para 9 above;

       (4) Any other relevant issue raised by either side.

    b. The Sub-Committee will act as a continuous committee for
       issues regarding this Article.

    c. The two sides will exchange, through the Sub-Committee, the
       relevant information regarding the implementation of this
       Article, including police reports, medical information,
       relevant statistics, premiums, etc.. The two sides will
       provide each other with any other assistance required in this
       regard.

11. Each side may require the re-examination of the arrangements set
    out in this Article a year after the date of the signing of the
    Agreement.

12. Insurers from both sides may apply for a license to the relevant
    authorities of the other side, according to the rules and
    regulations regarding foreign insurers in the latter side. The
    two sides agree not to discriminate against such applicants.

Done in Paris, this twenty ninth day of April, 1994

For the Government of Israel

For the PLO

Finance Minister Avraham Shohat

Abu Ala (Ahmed Korei)


2019-03-11T21:52:33-04:00

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