U.S. sees Palestinian forces needing billions in aid

By Adam Entous

JERUSALEM (Reuters) - Building Palestinian security forces for a future state will require a multibillion-dollar infusion of donor funds dwarfing existing commitments, according to U.S. estimates shared with European and Israeli officials.

A Palestinian security plan backed by Washington calls for consolidating President Mahmoud Abbas's forces into a nearly 50,000-member gendarmerie that can both police civilians and rein in militants who could try to block any future peace deal.

Internal cost estimates for the overhaul, $4.2 billion to $7 billion over five years, were compiled by U.S. security officials and their Palestinian counterparts, and recently shared with Israel and foreign diplomats, who expressed doubts that donors would produce such large sums anytime soon.

Only $86 million in funding from the United States has materialised so far to help build up Abbas's forces, which were routed from the Gaza Strip in June by Hamas Islamists who receive support from Iran and oppose the peace talks.

The funding gap highlights one of the biggest hurdles facing a U.S. push to reach a statehood agreement.

Even if a deal is reached before U.S. President George W. Bush leaves office next January, Israeli Prime Minister Ehud Olmert has vowed not to implement it until Abbas reins in militants, both in the West Bank, where his Fatah faction dominates, as well as in the Hamas-controlled Gaza Strip.

The U.S. Consulate in Jerusalem declined comment on the cost estimates, which a European diplomat said painted a picture of "how things might look at the end" and may be overstated.

"It shows the enormous challenge that lies ahead," a Western diplomat said of getting donors to make such large, long-term investments in Abbas's forces and creating a pension scheme to lure older commanders and fighters into retirement.