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April 21, 2003

Too odd to hazard a comment

Israel close to a deal on buying natural gas from Palestinians

JERUSALEM (AP): A deal between Israel, the Palestinian Authority and British Gas to drill for natural gas off Gaza could be finalized within a month, a spokesman for Israel's Infrastructure Ministry said Monday.

Plans to explore what are believed to be vast gas fields off Gaza had been put on hold since the outbreak of Israeli-Palestinian fighting nearly 31 months ago.

Israeli confidence was boosted by assurances from Palestinian Finance Minister Salam Fayad that Palestinian revenues would be placed in an account under his control, said Benny Rom, a spokesman for Israel's Infrastructures Ministry.

Fayad's letter to Israeli Infrastructure Minister Yosef Paritzky and Finance Minister Benjamin Netanyahu "will give a push'' to an agreement, under which Israel would buy much of the natural gas, Rom said. The Israeli government is optimistic the deal can be closed soon, he said.

Israeli officials previously expressed concern that Palestinian profits would be funneled to militants who have carried out scores of attacks against Israelis.

Fayad, a respected former International Monetary Fund official, has won praise for making the Palestinian Authority's finances more transparent. Fayad was appointed last June after complaints about Arafat's corrupt administration and Israeli charges that some government funds were funneled to terror groups.

John Field, the general manager of British Gas in Israel, said he was optimistic a deal could be concluded soon, but noted that have been setbacks in the past.

Once an agreement is in place, it would take two to three years to bring natural gas to the Israeli consumer, Field said, adding that the Palestinian market alone would be too small to justify the cost of exploration.

The deal will also enable a Palestinian gas-powered electricity plant to begin operating. Palestinians currently receive electricity from Israel.

A tender on the Israeli gas pipeline is still open to other companies for another two months, Rom said, although he said negotiations were being held with British Gas, who were "very interested.''