DUBAI. Sept 8: Palestinians are ready to set up a self-rule authority In the occupied territories four months after signing a deal with Israel, but the question remains: Where will the money to run it come from? says Reuter.

Washington 1s trying to put together an emergency fund of 590 million dollar for set-up costs but has failed so far to obtain firm commitments from potential donors, diplomats said.

The World Bank has unveiled a 4.3 billion dollar economic development plan for the West Bank and Gaza Strip covering the next eight to 10 years — an Indication of the massive scale of the economic crisis In the territories.

The Bank has invited Israel and Its Arab neighbours to a meeting in Washington on September 20 to discuss the report. But diplomats In the Gulf said the talks were to be attended by economists rather than decfsion-maklng politicians and were- unlikely to be the forum for donors to show their h^nd.

Rich gulf Arab states, some still reeling from the enormous costs of the Gulf War, are balking at the massive amounts of money Involved.

And the Palestine Liberation Organisatlon(PLO) flush with funds through the 1970s and 1980s when some of Its officials were derided as play boy revolutionaries for parading in

luxury cars and designer clothing, is virtually bankrupt.

Us coffers were drained after it lost its main source of Income when It angered the wealthy Gulf Arab oil states over Its sympathy with Iraq following Baghdad's 1990 Invasion of Kuwait

Paradoxically, these same Gulf states are being asked to hear the lion's share of the emergency funding and for the World Bank plan.

Palestinians, who say they need about 1.3 billion dollar a year Initially, say finance Is a

major problem that has yet to be overcome. The PLO estimates total need over 10 years at 11.2 billion dollar.

The Gulf states are being told that by pouring money Into the Palestinian homeland, they would be Investing tn fiiture security and stability ... that prosperity In the territories would remove a potential flashpoint for trouble that could spread to the rest of the Middle East." one diplomat said.

"Understandably, they are sceptical," he added.

Palestinian sources said the

emergency fund and substantial commitments for the longer term World Bank plan.

Gulf Cooperation Council foreign ministers, who ended a two-day meeting in Riyadh on Monday, welcomed the proposed PLO-lsrael deal, but made no public mention of the cash needed.

Gulf diplomats said this did not mean they would not pay. But any contribution was likely to be limited and come from Individual states rather than from their GCC regional alliance.

They said Kuwait In particular remained deeply antagonistic to the PLO and Its leader Yasser Arafat. Any aid was likely to be channelled to bodies such as the World Bank or independent Arab or Palestinian Institutions, rather than directly to the PLO, they added.

The diplomats satd the United States had made clear It would not carry the full burden of bankrolling tl>e peace process.

Washington was putting heavy pressure on Ils partners In the 0-7 group of wealthy industrialised nations, especially Japan apd the European Community, to take on meaningful commitments.

They have promised to help but have yet to spell It out In dollar and cent" one diplomat said.