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A World Bank team that drew up a position paper on the Gaza Strip's future after an Israeli withdrawal has expressed reservations about handing over the settlements that are to be evacuated to a third party without the participation of the Palestinian Authority. It proposes that the 17 Gaza Strip settlements and the four in the West Bank be transferred to a special Palestinian agency set up for this purpose that will work in conjunction with foreign experts and decide how to distribute the assets equitably to the Palestinians.

"This body could serve as a `technical partner' to the PA... assist and monitor the asset transfer and disposal process, and could interface between the PA and the government of Israel," the report adds.

The report was yesterday delivered to Yasser Arafat in Ramallah and to the Foreign Ministry in Jerusalem. It proposes that the legal framework establishing the agency be established before the Israeli withdrawal begins and that the agency report to the Palestinian Legislative Council.

Local World Bank representative Nigel Roberts said yesterday that this would provide the Palestinian Authority with the ideal opportunity to renew its legitimacy. Roberts added that the process requires preparations, technical assistance, transparency and supervision as well as an element of justice in the distribution of the assets of the settlements to the Palestinian population.

Israeli officials had earlier put forth the idea that international bodies would be granted custodianship for the settlements before the Palestinians receive them, but the study expressed legal and practical reservations about this and added the opinion that the PA would be capable of handling the issue.

A custodianship of this nature raises many questions, the study says. "First, it is unclear that a third party has the legal authority to receive, administer and dispose of these assets. A more pressing question is how a custodian could in reality secure the assets against destruction, looting or squatting in the event of a breakdown of Palestinian authority. Third, a custodian would have to accept a significant reputational risk - even a token pass-through role would not absolve the custodian of blame for any subsequent misuse of the assets."

The report says that the 17 Gaza settlements sit on 15-20 percent of the Strip's land and that, in December last year, their population numbered 7,254 persons in some 1,500-2,000 homes. The economic resources of the settlements consist of 32 square kilometers allocated to agriculture, 160,000 square meters of buildings and 18 business enterprises located in the Neveh Dekalim industrial area. "Although situated on some of the best-watered and richest arable land in Gaza, the settlements use little of it and produce well below the area's potential," the report says.