Jerusalem (CNSNews.com) - Palestinian Authority Chairman Yasser Arafat got a financial slap on the wrist on Tuesday when a visiting European Union delegation demanded he be financially accountable and combat corruption if he wants the EU to release funds to the crumbling Palestinian economy.
Under intense international pressure to ease a blockade of Palestinian cities - which has been blamed for an economic crisis in the Palestinian Authority - Israel loosened its grip on PA-controlled Ramallah on Tuesday and eased restrictions on four other PA-controlled towns in the disputed West Bank.
But Israeli Prime Minister Ariel Sharon refused to accept the responsibility for bringing the PA to near economic ruin as a result of the closures, blaming it instead on Palestinian violence and terrorism and the PA's violation of agreements with Israel.
Israel opened up two passages to and from PA-controlled Ramallah on Tuesday. But traffic piled up at the exits as all Palestinian vehicles had to undergo a stringent search when leaving the city. According to Sharon, Israel sealed off the Palestinian economic and population center on Monday, in order to prevent a threatened terrorist attack.
Washington called on Israel to suspend its blockade of the PA areas saying that "economic pressure [and] the restrictions on movement...place hardship on families, undermine relations between Israel and the Palestinians [and] don't really quiet the security situation in the region."
Palestinians view the closures, which prevent the free flow of goods as well as prohibit 100,000 Palestinians from reaching jobs in Israel, as a form of collective punishment. But Israel says this is one method of preventing terrorist attacks.
Israel has also been withholding hundreds of millions of dollars in taxes it has collected from the Palestinians since the beginning of the intifadah five months ago.
A visiting EU delegation led by Foreign Minister Anna Lindh of Sweden which currently holds the EU's rotating presidency, and EU Commissioner for External Relations Chris Patten met with Israeli leaders on Tuesday and urged an end to the blockade.
"We're very concerned about the blockade and have been ever since it was put in place," Patten said. "The first thing is to stop things [from] getting any worse and try to start once again the talks and the process of building a little more understanding and trying to insure some stability."
Sharon briefed the delegation on the dangers of Palestinian terrorism, which he said is being perpetrated by Arafat's own security forces and presidential guard as well as Hamas and Islamic Jihad.
Sharon said his goal was to act against those who plan and carry out terrorist attacks, while aiding the "peaceful populations" that don't participate in terrorism.
In order for the blockade to be lifted, a statement from Sharon's office said, Arafat must "personally call for a halt to both terrorism and incitement, begin counter-terrorist actions and return to the security coordination."
In his meeting with the EU delegation, Sharon blamed the PA's current economic crisis on its own choice to "use violence and terrorism," neglect negotiations and violate agreements with Israel.
Further, Sharon said, it would be "immoral" to demand that Israel pay the funds it owes the PA, when that money is being used to pay the salaries of Palestinian forces that are involved in terror attacks.
Later, the EU delegation told Arafat that he must shore up his budget and deal with corruption if he hopes to receive additional funds from the EU.
David Kriss, Press and Information Officer of the Delegation of the European Commission to the State of Israel said that since the outbreak of the intifadah in September, the EU has made two emergency loans to the PA totaling 57.5 million Euros ($53.3 million).
However, EU foreign ministers decided last month that another 60 million Euros ($55.63 million) would only be made available to the PA if there were guarantees of "transparency," a "leaner budget," and if there was a general effort by the international community to join together in providing funds.
Part of the EU's mission at this time was to discuss the transfer of those funds, Kriss said. However, he added, that there was no sense from the delegation after meeting with Arafat that the EU would give the money imminently.
The delegation, he said, had made it clear that there was a difference between "getting a letter" of assurance about the funds from the PA and the actual "situation on the ground." The PA needed to tighten its budget belt, act against rampant corruption and find other donors to contribute, Kriss said.