RAMALLAH, West Bank, 15 April 2008 — The Palestinian government unveiled a plan yesterday to build 30,000 affordable apartments over five years and offer $500 million (315 million euros) in long-term mortgages.

The construction is meant to create thousands of jobs and ease a severe housing shortage. The Palestinians need 65,000 apartments now, and demand is growing by 11,000 homes ever year, officials said.

Under the plan, ten new suburbs would be built in the West Bank and Gaza, each with a commercial center, school and mosque. The Gaza part of the plan will be on hold as long as Hamas remains in control there, said Palestinian President Mahmoud Abbas, who attended the launch of the project.

Abbas said such economic development would give the Palestinians more faith in a better future. The housing project “will make Palestinians feel that peace and security is bringing them a better life,” he said.

The $1.5 billion (1 billion euro) construction project will be overseen by the Palestine Investment Fund, which hopes to bring in private investors from the Palestinian territories and the Arab world. Long-term mortgages are rare in the Palestinian territories, where most would-be homeowners save for long periods, borrow from relatives or build their homes over many years.

The contributions for the $500 million home finance company will come, among others, from the US Overseas Private Investment Corporation (OPIC), the World Bank’s International Finance Corporation, the Palestine Investment Fund and the Bank of Palestine. OPIC is the largest contributor with $250 million (158 million euros).

“In the United States, it’s long been said that owning your own home is an American dream,” said Robert Mosbacher, head of OPIC. “But the truth is it’s a universal dream. We’re glad to help making this dream possible for the Palestinian people.” International Middle East peace envoy Tony Blair portrayed the housing project as step in the right direction.

Blair has tried to help revive the Palestinian economy, including by sponsoring three West Bank industrial parks.

However, progress has been slow, in part because of the reluctance of the Israeli military to remove roadblocks over concerns of attacks by Palestinian fighters. “I hope that despite all the difficulties and challenges which everybody knows, today’s announcement will give some indications of what is possible,” Blair said.

‘Olmert Meeting Focused on Truce’

Abbas said yesterday that Israel is ready to reach a truce with the Hamas-run Gaza Strip but through Egyptian mediation, a government spokesman said.

Abbas made his comments at a Cabinet meeting in Ramallah the day after his second meeting in a week with Israeli Prime Minister Ehud Olmert in Jerusalem.

“The meeting (with Olmert) focused on a truce, the means of applying it and imposing security,” said Palestinian government spokesman Riyad Al-Malki.

Abbas spoke “about Israeli conditions and claimed that Olmert showed he was ready for a truce with the Egyptians as intermediary,” Al-Malki said. The Palestinian leader said Israel’s conditions for a Gaza truce included “a halt to all rocket attacks, respect for the truce by all (Palestinian) factions and an end to contraband” between Gaza and Egypt, Al-Malki added.

Abbas stressed that Israel would sign an accord with the Egyptians and not Hamas, the spokesman said. Top Palestinian negotiator Saeb Erekat has been sent to Egypt and Jordan to pursue the truce negotiations.

After the Cabinet meeting, Abbas told reporters that “efforts are increasing with the Egyptians to reach a truce” in the Gaza Strip.

Universities Shut Down in Gaza

The Gaza Strip’s four main universities shut down yesterday after officials said students could not get to class because of fuel shortages.

University officials said attendance rates were down by at least 60 percent for most classes yesterday, prompting the suspension. Most universities will suspend classes until Thursday, when officials said they would put together an emergency education plan. That may include conducting some lectures over the Internet and radio, officials said.

The shutdown affects more than 45,000 students. “This is a genuine crisis,” said Ali Al-Najjar, an official from Azhar University, affiliated with Fatah, the movement headed by Abbas.

The Gaza Strip is suffering crushing fuel shortages, caused by reduced Israeli fuel supplies and local Palestinian problems. Israel closed its only fuel transfer terminal last week after Palestinian gunmen attacked the site, killing two Israeli workers.

Cars lie idle on Gaza streets, and many vehicles still running are using fuel alternatives: cooking gas, mixtures of vegetable oil, diesel and kerosene.

Shortages were aggravated last week after Gaza fuel distributors stopped selling the reduced amounts that Israel was providing, to protest the cutbacks.

Hamas has seized on the shortages to play up Palestinian suffering. Many Palestinians in Gaza quietly mutter that Hamas is hoarding supplies. Hamas denies that.