January 2000

Palestine Territories Update Memo

The following report outlines new developments in the past three months and the state of on-going developments.

1. Jordan and Israel co-operation on cable link effects on Palestinian Authority

The resumption of peace talks between Israel and the Palestinian Authority following the May election of Israeli Prime Minister Ehud Barak has led to a warming up of economic ties between the two countries. "Telecommunications co-operation is key to expanding the economic ties between Israel and Jordan as well as in the Middle East," said Ben-Eliezer during his visit to Jordan.

The construction later this year of two 10-kilometer fiber optic cables linking Israel and Jordan will mark the first regional telecommunications project between Israel and any of its Arab neighbours. The links, which cost a total of $3.5 million and are due to be operational from February 2000, are expected to result in greater competition in both countries. The agreement between Tel Aviv-based Bezeq International Ltd., a wholly owned subsidiary of Bezeq Telecom, and Amman-based Jordan Telecommunications Company (JTC), was announced on September in Amman during a visit by Israeli communications minister Benjamin Ben-Eliezer.

Construction of the two Israel-Jordan cables, which will have a total capacity of 10 gigabits, is slated to begin by the end of the year. The fiber optic cables will link the countries at two locations: at either the Allenby or Sheikh Hussein bridge border crossings; and at the southern border between the two countries at the towns of Aqaba, Jordan and Eilat, Israel.

Initially, the two cables will handle the traffic between Israel and the Palestinian Authority to Jordan. Voice traffic between Israel and the Palestinian Authority and Jordan ranks fourth in terms of the number of call minutes for both Bezeq International and JTC. The new fiber optic links between Israel and Jordan are expected to handle voice primarily, but Bezeq International hopes that JTC will opt to use the cables for Internet services, creating additional traffic, because Israel has a better connection to the IP backbone than Jordan.

2. Y2K status reports on Palestinian Territories

Nabil Shaath, Minister of Planning and International Cooperation, said that he expected no hitches in the telecommunications system, modified jointly with Israel. Palestinian traffic through Israel's network is about 70 percent, Qadah said.

Ghassan Qadah, senior technology adviser at the Planning Ministry, said that the Palestine Telecommunications Company has been working on its readiness since 1998. They have developed and tested contingency plans and set up an emergency centre. "We believe if there will be problems, they too will be isolated."