AL QUDS: A senior Israeli commander, Major-General Uzi Dayan, completed his tour of duty the other day with a warning that the ailing Israeli economy will be unable to support the military campaign against the Palestinians for much longer.

Gen Dayan, who resigned on Friday as head of the country’s national security council, estimated that the conflict was costing Israel about $3 billion annually. In a final report

on Israel’s relationship with the Palestinians, he urged Ariel Sharon, the Israeli prime minister, to decide between a secure border, re-occupation or the creation of a Palestinian state.

A nephew of the legendary Israeli commander of the same name from the 1967 war, Gen Dayan told the Knesset foreign and defence committee earlier this week that the economy could not be revived and welfare requirements met unless security improved.

The economy could yet determine Sharon’s future, as well as the direction of the Israeli-Palestinian conflict. Yaron Ezrahi, a left-leaning Israeli academic, said: “The economy is not on the brink of disaster, but it is breathing heavily.” He added: “Israel has the potential to be another Singapore if, firstly, there is an end to violence and, secondly, a wise economic policy. At present, we do not have either.”

Avraham Shochat, a finance minister in the previous government, had an even blunter assessment. “Without a peace process, the economy will continue to collapse,” he said. “Our fate is intertwined with the Palestinians.”

The threat of suicide bombers also keeps many Israelis away from city centres. Some shops in the centre of Jerusalem are boarded up, as traders are fed up with the stop-go nature of business: just as streets which have been deserted for weeks after a suicide bomb see a gradual return of trade, there is another bombing.

Sharon plans to increase defence spending. Adva, an Israeli thinktank, said that every other departmental programme — health, education and, especially, welfare — will be cut, and low-income families will be the main casualties.—Dawn/The Guardian News Service.