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(photo credit: Courtesy: Peres Center for Peace )
Israeli and Palestinian Cabinet ministers shared ideas on Wednesday for shoring up the fledgling Palestinian economic recovery, in the first high-level talks between the sides since Prime Minister Binyamin Netanyahu took office in March.
But Palestinian Authority Minister of Economy Basem Khoury, who met with Vice Prime Minister and Minister of Regional Cooperation Silvan Shalom, said that the meeting had no political implications and did not signal any change in the PA's policy.
Khoury also blamed the Israeli media for "blowing the story out of proportion," adding that the meeting had been arranged several months ago.
He said that talks with Shalom were restricted to issues related to day-to-day life in the PA territories. "This was not a political meeting," he explained. "We didn't discuss any political issue."
Khoury said that he could not understand why some in the Israeli media were describing the meeting as if it were a breakthrough in relations between the PA and Israel.
He said that the PA's declared policy of refusing to resume the peace talks unless Israel froze all settlement construction and accepted the two-state solution was still effective.
Last week, both Israel and the Palestinians said Palestinian Authority President Mahmoud Abbas would soon hold his first meeting with Netanyahu, despite Israel's refusal to freeze settlement construction.
The PA's downplaying of the event notwithstanding, Wednesday's meeting at the capital's King David hotel was the first Cabinet-level encounter between the Netanyahu and Abbas governments. The agenda included easing restrictions on the entry of Palestinian businesspeople and VIPs to Israel; boosting Israeli meat exports to the West Bank and dairy imports from the West Bank to Israel; and allowing more Palestinians to seek medical care in Israel, Israeli officials said.
Proposed joint industrial parks - an idea that has foundered in the past amid violence - were also to come up in the talks, the Israeli officials said.
Netanyahu has said he wants to make "economic peace" with the Palestinians, saying it could reduce the risk of violence and pave the way for more substantive talks on resolving the decades-long conflict.
Khoury and Shalom shook hands before closeting themselves in a meeting room at the hotel.
"Our objective is economic peace," Shalom told reporters. "That doesn't prevent political dialogue, but rather, assists and gives it momentum."
Khoury said he looked forward to the meeting and that the objective was to improve conditions for the Palestinians.
Teams of government officials from both sides were to join them later for a broader discussion.
Following the meeting, Shalom and Khoury agreed to continue the encounters on a monthly base.
In July, the two attended a conference on economic peace organized by the Peres Center for Peace, Tel Aviv University and the German Friedrich Ebert Stiftung.
Shalom and Khoury had sat next to each other and shook hands when meeting and departing, and though the Palestinian representative made sure to note that it was by no means a bilateral meeting, both sides had reiterated their governments' desire for peace.
Economic improvement in the West Bank could boost Abbas, sharpening the contrast to the misery of the impoverished and isolated Gaza Strip, ruled by his rival, the Islamic terror group Hamas. Popular support for Abbas has ebbed because he had nothing to show for a year of peace talks with Netanyahu's predecessor, Ehud Olmert.
Privately, some Palestinians concede that Netanyahu has done more to improve conditions for the Palestinians during his five months in office than Olmert did in three years, despite his oft-stated commitment to reaching a peace accord.
Since Netanyahu has taken office, he has taken down some roadblocks in the West Bank, allowing for a smoother movement of goods and a consequent upswing in the West Bank's retail and entertainment sectors.
Earlier this year, the International Monetary Fund predicted that the Palestinian economy could grow by 7 percent this year, its first optimistic forecast in three years.
Israel imposed the roadblocks and other travel restrictions at the height of violence earlier this decade, in order to prevent the movement of terrorists.
Israeli officials were to meet later Wednesday in New York with George Mitchell, US President Barack Obama's Mideast envoy, to discuss the settlement issue.
In the absence of formal peace talks, Abbas aides have said he might meet with Netanyahu on the sidelines of a UN meeting later this month.
Ron Friedman and Jpost.com staff contributed to this report.