Military

DATE=8/4/04

TYPE=CORRESPONDENT REPORT

TITLE= EU/PALESTINIANS (L ONLY)

NUMBER=2-318024

BYLINE= ROSS DUNN

DATELINE=JERUSALEM

HEADLINE: EU to Question Prisoners About Terror Funding

INTRO: The European Union is seeking to interview Palestinian prisoners in Israeli jails about the Palestinian Authority's alleged use of European donor money to fund terrorism. Ross Dunn reports from Jerusalem.

TEXT: Officials confirmed Wednesday that a request had been made by European officials to Israel's National Security Council.

The European Union wants to carry out interviews with Palestinian prisoners being held by Israel. The investigations are part of an inquiry launched last year by the E.U. anti-fraud unit at the request of the European parliament.

A parliamentary inquiry in April found no conclusive evidence that the Palestinian Authority misused E.U. funds. But some European lawmakers questioned the report and asked for more inquiries by the anti-fraud office.

The European Union is the biggest foreign donor to the Palestinian Authority and provides more than 96-million dollars a month to fund Palestinian public salaries.

E.U. investigators visited Israel earlier this year and reviewed Palestinian Authority documents seized by Israel and also heard testimony by members of Israel's secret police.

Some of the documents were confiscated by Israeli troops during raids on Palestinian President Yasser Arafat's headquarters in the West Bank city of Ramallah.

The E.U. investigators are focusing on whether European money had been diverted to the al-Aqsa Martyrs' Brigades, the armed wing of Mr. Arafat's Fatah faction.

The investigators plan to talk to jailed members of the organization who have been convicted of carrying out terrorist attacks against Israel.

In the past, some members of the al-Aqsa Martyrs' Brigades have said they received funding from the Palestinian Authority and had been encouraged by Palestinian security officials to continue carrying out attacks. (Signed)

NEB/RD/DW/KBK/KL