§ 1. Mr. Robert Key (Salisbury)
What recent assessment he has made of whether EU development funds for Palestine have been misdirected to terrorist causes. 
§ The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)
Without EU assistance to the Palestinian Authority, it is likely the Authority would by now have collapsed, further exacerbating the dire humanitarian situation in the occupied territories. The European Commissioner for External Relations, Christopher Patten, has made it clear thatthere is no case for stating that EU money has financed terrorism".At the London meeting on Palestinian reform on 14 January, which I chaired, there was widespread recognition that the Palestinian Authority has achieved great progress on financial reform.
§ Mr. Straw
We all accept the right of all countries, including Israel, to take effective and proportionate action to deal with a security threat. We have faced a similar but not such a great terrorist threat in our time, and the terrorists have to be pursued vigorously. At the same time, we also know from our experience that there has to be a political process—not to excuse the terrorists, for whom there is no excuse, but to deal with the environment in which terrorism breeds. That is why we are fully committed to the quartet process and the development of the road map.
§ Richard Burden (Birmingham, Northfield)
I endorse what my right hon. Friend says about the progress made by the Palestinians in reforming and, indeed, the tribute that has been paid to the new Finance and Industry Ministers of the Palestinian Authority in taking that 150 forward. However, if we are to achieve reform and the kind of transparency referred to, does he agree that it is vital that the Palestinians are allowed to hold the elections that they want to hold, but which is rather difficult when candidates cannot move from one town to another because of daily curfews and closures? Does not Israel have a responsibility to lift them to allow those elections to go ahead?
§ Mr. Straw
There are two sets of responsibilities. There is one on Israel to facilitate elections and to lift unnecessary and disproportionate restrictions on the Palestinians' daily lives, including the operation of their democratic processes. Separately, there are responsibilities on the Palestinians themselves. There is much that they can do to reform the way that they operate, notwithstanding all the unnecessary restrictions. That has been shown by the progress in reforming the way that their financial systems operate, and it therefore raises in stark relief the lack of progress, which we agreed last Tuesday had to be dealt with, in respect of other issues, including security sector reform and judicial reform.
§ Mrs. Louise Ellman (Liverpool, Riverside)
Given that the military wing of the Palestinian Authority, the Al Aqsa Martyrs Brigade, claims responsibility for blowing up and murdering at least 23 Israelis in Tel Aviv on 5 January this year, does my right hon. Friend accept that the Palestinian Authority is at the centre of terrorist activity?
§ Mr. Straw
I have not seen any evidence to suggest that the people from the Palestinian Authority whom I met were at the centre of terrorist activity—rather the reverse. They expressed similar horror and repulsion at such unnecessary and gratuitous killing as anyone else who is a member of the civilised world. However, I certainly accept one implication of my hon. Friend's question: a huge agenda remains for reforming the security sector inside in the Palestinian Authority. We cannot have a situation where there are nine separate security organisations, some under effective control by the Palestinian Authority, but some no more than terrorist organisations masquerading with the authority of the Palestinian Authority. That has to be changed.
§ Richard Ottaway (Croydon, South)
Does the Foreign Secretary agree that dialogue is the best way to combat terrorism? Bearing that in mind, why did he decline to meet Mr. Netanyahu when he was in London?