Posted on September 6, 2008

In an extravagant ceremony that featured acrobats, drummers, a children's choir, and speeches by Israeli Prime Minister Ehud Olmert (in person) and the two top executives of chipmaker Intel Corp. (on giant video screens), the company this month dedicated a new, state-of-the-art chip-manufacturing plant in the south-central Israeli town of Kiryat Gat

The hoopla is understandable, from the Intel and Israeli perspectives. The new facility, known as Fab 28, is the largest private-sector investment ever made in Israel: the company has sunk $3 billion into it, and the Israeli government kicked in another $525 million. Since the groundbreaking 28 months ago, it's been the biggest construction project in Israel -- this side of the apartheid wall, that is.

Together with another multi-billion-dollar facility Intel built a decade ago on an adjoining site, the work has transformed Kiryat Gat, a drab and previously obscure industrial town on the northern edge of the Negev desert, into one of the crown jewels of Israel's booming high-tech economy. Once the plant reaches full production next year, it's expected to produce $10 million worth of Intel's most advanced microprocessors every day -- by itself enough to boost Israel's gross domestic product by nearly two percent.

The atmosphere at the 1 July dedication ceremony was strictly upbeat, to judge by the press reports. Behind the scenes, however, the picture wasn't so rosy. The immediate concern is the sharp decline of the dollar, which has undermined the economic assumptions the new project was based on. After telling reporters that the problem "could put the flow of future investment in jeopardy" and even warning "the possibility of [Intel] moving its Israeli operations to the Far East now looms closer than ever before," company executives hurried off to discuss the problem with Israel's central bankers, the Israeli daily Haaretz reported.

Of course, the alarmist talk may just be Intel's way of squeezing additional subsidies or other concessions out of the Israeli government, but the authorities will no doubt listen closely: with some 6,100 employees in Israel -- more than in Silicon Valley -- Intel is the country's largest private employer.

Though the press doesn't mention it, Intel's leaders probably also worry about the security situation. At least they ought to: Kiryat Gat happens to be only about 15 miles from the northern Gaza Strip, and the Shin Bet (Israel's domestic security apparatus) claims that Palestinian resistance forces in the Strip now have some rockets capable of traveling that distance. Unless the shaky "calm" currently prevailing in Gaza is somehow, to everyone's surprise, solidified and extended, Intel's multi-billion-dollar complex could be in range of new, longer-range rockets.

Meanwhile, the local authorities in Kiryat Gat are focused on preventing yet another kind of "disaster," as they put it: Jewish girls taking up with Bedouin boys. So common has this phenomenon become that the municipality last year convened an "emergency" conference to address it. The upshot: a program run by the municipal welfare department, with support from the police, that sends speakers into public school classrooms to warn girls about the dangers they face from Arab boys. The curriculum even includes a 10-minute video entitled "Sleeping with the Enemy."

Nakba inside

Residents of al-Faluja flee in 1949. (Palestine Remembered)

These recent developments have brought unaccustomed attention to Kiryat Gat, at least within Israel. But even the Israeli press doesn't discuss what's most interesting about the town: its origins.

Sixty years ago, there was no Kiryat Gat. The land it now occupies was divided between two Palestinian villages, al-Faluja and 'Iraq al-Manshiya. While the area is well within the Green Line, Israel's 1949-67 border, its history is in one way unique: Israeli forces never captured it during the 1948-49 war. Egyptian forces occupied it in late May 1948, and although later Israeli counter-offensives broke up their front and laid siege to the two villages -- known at the time as the "Faluja pocket" -- the 4,000 Egyptian troops deployed there (including a young officer named Gamal Abdel Nasser, soon to become president of his country) held out until Egypt and Israel agreed to an armistice on 24 February 1949.

That's when the Nakba befell al-Faluja and 'Iraq al-Manshiya.*

Stranded and surrounded, the Egyptians were in no position to stay in the area. To their credit, however, they insisted as a condition of their withdrawal that Israel guarantee the safety of the civilians in the area -- about 2,000 locals and some 1,100 refugees from other parts of Palestine.

In principle, Israel accepted the Egyptians' demand. In an exchange of letters that were filed with the United Nations and appended to the main armistice agreement, the two governments agreed that civilians who wished to remain in al-Faluja and 'Iraq al-Manshiya would be permitted to do so, and that "All of these civilians shall be fully secure in their persons, abodes, property and personal effects."

Within days, however, it was clear that the agreement wasn't worth the paper it was written on. Under the direction of Yitzhak Rabin (later Prime Minister of Israel), and probably with the direct approval of founding Prime Minister David Ben-Gurion, according to historian Benny Morris, Israeli troops promptly mounted "a short, sharp, well-orchestrated campaign of low-key violence and psychological warfare designed to intimidate the inhabitants into flight."

What Morris labels "low-key," however, probably didn't seem so to the victims. He himself quotes a survivor's testimony that the Israeli army "created a situation of terror, entered the houses and beat the people with rifle butts."

Members of an American Quaker relief mission who were in the area at the time kept a diary detailing the violence they observed, such as the case of a man brought to them with "two bloody eyes, a torn ear, and a face pounded until it was blue." And UN observers reporting to Ralph Bunche, the distinguished African-American diplomat then serving as chief UN mediator in Palestine, noted not only beatings and robberies, but also cases of attempted rape and "promiscuous firing" on civilians by Israeli soldiers. (Bunche, who won the 1950 Nobel Peace Prize for his efforts, had assumed the chief mediator's post a few months earlier, after the assassination of his predecessor, the Swedish Count Folke Bernadotte, by a Jewish terrorist organization led by Yitzhak Shamir, also a later prime minister of Israel.)

Israel supporters, of course, are quick to dismiss even such eyewitness accounts as exaggerations if not outright fabrications. But even the most ardent Zionist can't easily dismiss one other source who documented what happened in the Faluja pocket: Israel's own foreign minister at the time, Moshe Sharett. Observing the blatant contradiction between the solemn diplomatic commitment his government had just undertaken and the behavior of its forces on the ground, he worried that it might jeopardize Israel's campaign to gain UN membership. On 6 March 1949, just ten days after the agreement with the Egyptians, he fired off an angry memo to the Israeli army, charging that its actions in al-Faluja and 'Iraq al-Manshiya were throwing into question "our sincerity as a party to an international agreement." Noting that Israel was trying to argue at the UN that it was not responsible for the Palestinian refugee problem, he wrote, "From this perspective, the sincerity of our professions is tested by our behavior in these villages. ... Every intentional pressure aimed at uprooting [the local population] is tantamount to a planned act of eviction on our part."

Sharett objected not only to the overt violence, but also to what he said was a "whispering propaganda campaign" conducted covertly by the Israeli army, threatening the civilians with "attacks and acts of vengeance by the army" if they didn't leave the area. "This whispering propaganda is not being done of itself," Sharett continued. "There is no doubt that here there is a calculated action aimed at increasing the number of those going to the Hebron Hills [then controlled by Jordan] as if of their own free will, and, if possible, to bring about the evacuation of the whole civilian population" of the Faluja pocket.

Whether Sharett's concerns had any moderating influence on the army's behavior isn't clear, but they certainly didn't change the outcome. By mid-March all of al-Faluja's residents had abandoned their homes; the residents of 'Iraq al-Manshiya held out longer, but after several shootings by Israeli sentries, the last of them -- some 1,160 people -- left in Red Cross-organized convoys on 21 and 22 April.

Five days later, Rabin ordered the demolition of both villages.

In sum, they fell victim to the same tactics Israeli forces had perfected during the ethnic cleansing of the rest of their new state over the previous year. The only thing unusual about al-Faluja and 'Iraq al-Manshiya was that Israel had formally promised not to do what it did, that so many Westerners were on hand to document the process, and that even a top Israeli official provided confirmation of their accounts.

Rise of a high-tech center

In 1955 Israel established a "development town" -- a settlement for new immigrants, originally mainly from North Africa, later also from Ethiopia and the former Soviet Union -- on the site of the destroyed villages of al-Faluja and 'Iraq al-Manshiya. It was called Kiryat Gat (Gat City) in the mistaken belief that it was the site of the ancient Philistine town of Gath, home of the biblical Goliath; the actual site of Gath was later discovered 13 kilometers away.

Initially, Kiryat Gat's major industries were agriculture and textiles. But in the mid-1990s Intel, which had established other facilities in Israel beginning in 1974, chose Kiryat Gat -- a section that was once part of 'Iraq al-Manshiya -- as the site for a huge new plant it called Fab 18. ("Fab" is chip-industry lingo for a facility where semiconductors are fabricated.) Intel put in $1 billion -- at the time the largest foreign investment ever in Israel -- and it persuaded the Israeli government to contribute another $600 million to build and equip the plant. Surrounded by a seven-meter-high concrete wall topped by a tall fence of green metal bars, it opened in 1999 and was soon cranking out Pentium processors worth more than $1 billion a year. In the early years of this decade, it was often described in the semiconductor-industry trade press as Intel's most profitable plant.

In the fast-moving chip industry, however, production facilities age rapidly, and by now Fab 18 is well behind the cutting edge, despite a $600 million update. So this year Intel turned it over to a Numonyx, a new joint venture with STMicroelectronics and other investors, which will use it to produce flash memory, a product that doesn't require state-of-the-art technology.

Meanwhile, Fab 28 has been going up next door. The new complex consists of four buildings occupying more than 70 acres and incorporating, among other things, 45,000 light fixtures and more than 770,000 meters of cable -- 1.7 times the entire length of the state of Israel. It is only the third Intel fab equipped to use the company's most advanced production techniques, making chips with 45-nanometer circuitry on 300-millimeter silicon wafers. (A nanometer is a billionth of a meter.)

For the future, an Intel executive last year told reporters that the company was already planning a third Fab plant in Kiryat Gat. In his speech at the 1 July dedication, Olmert said that his government was prepared to offer Intel Israel another $1 billion in grants. At this point, however, when or whether additional construction takes place probably depends on what happens with exchange rates -- and possibly the risk of further instability in nearby Gaza.

What have Palestinians gotten out of all this? A spokesman for Intel told me its payroll in Israel includes "several hundred Palestinian employees," but company policies precluded him from offering further details. In addition, he sent the author a press release about a corporate vice president's participation in the Fatah-promoted Palestine Investment Conference held in Bethlehem in May. "As part of its ongoing commitment to Palestine," the release said, the company is helping Birzeit University establish a new computer lab, sponsoring a business-plan competition for budding Palestinian entrepreneurs, providing up-to-date computers for an after-school program in Ramallah called the Intel Computer Club, and starting work on a multi-year plan that will include donating 900 low-end "classmate PCs." There was no mention of the "Intel Information Technology Center of Excellence" the company once announced it would establish near Gaza City.

As for the rightful owners of the land Intel now occupies, one recent analysis reported that 14,345 refugees from 'Iraq al-Manshiya (including the descendants of those expelled in 1949) were registered with UNRWA, the UN agency for Palestinian refugees; of these more than 9,000 were living in Jordan, more than 5,000 in the West Bank, several dozen in the US, and others scattered around the world. From al-Faluja, a 1998 estimate put the total number of refugees at 33,267.

Future challenges

Given Intel's importance to the Israeli economy, the scandalous history of the land on which its Fab facilities are built, and the pervasiveness of its products, it might seem a natural target for activists seeking to use economic pressure to support Palestinian rights. Indeed, Al-Awda, the Palestine Right to Return Coalition, has been calling for a boycott of Intel since at least 2001. The group renewed its call in 2005, after Intel announced plans for the new Fab 28, and later reported that it had generated some 2,000 letters of protest to the company. The call is still posted on many web sites, especially in Europe, that promote boycotts, divestment, and sanctions against Israel.

It appears, though, that there's little active organizing around the issue. Frankly, it's tough to get even sympathizers to stop buying Intel-based PCs, especially now that the one major alternative chip supplier, Advanced Micro Devices, has once again fallen behind its rival. In addition, Apple's adoption of Intel as the sole supplier of processors for its Macintosh computers in 2006 has compounded the problem, because so many activists are committed to the Mac platform.

What about legal recourse -- could the refugees from al-Faluja and 'Iraq al-Manshiya and their descendants at least seek some kind of compensation for their dispossession from Intel through the courts? Realistically, it's obvious that such a case wouldn't get far, at least in American or Israeli courts, but in legal terms the Palestinians appear to have a solid claim. Five years ago, when I first wrote about Kiryat Gat, I posed the issue to two noted attorneys from opposite ends of the political spectrum: Francis Boyle, professor of international law at University of Illinois College of Law and a longtime supporter of Palestinian rights, and Abraham Sofaer, George P. Shultz Distinguished Scholar and Senior Fellow at the Hoover Institution at Stanford University, a former federal judge who served as legal adviser to the US State Department (and occasional Middle East negotiator) from 1985 to 1990.

Neither of them was familiar with the facts of the Kiryat Gat story, but in response to my summary, they agreed that the Palestinians might well have a case. Boyle suggested that they could file a type of action known as an in rem proceeding, which seeks the return of property to its rightful owner -- a legal strategy, he noted, that had been used successfully not only in cases involving the former British colony of Rhodesia (Zimbabwe), but also by Jewish survivors of the Holocaust.

As for Sofaer, he expressed doubt that any court would get involved in the absence of a treaty resolving the overall conflict between the Israelis and the Palestinians and establishing legal structures for settling property claims. But if peace ever comes, he said, "I'd be very happy to represent the Palestinians. It sounds as if there's potential in the long run for recovery here."

The question facing activists and all those working for justice in Palestine, is should they wait for the ever-elusive peace deal before taking Intel to court? Or begin preparing the legal groundwork for a case combined with reinvigorating the boycott against the company in earnest now?

*This historical account is based on Benny Morris' book, The Birth of the Palestine Refugee Problem Revisited.

Henry Norr covered Intel as a technology reporter and columnist for the San Francisco Chronicle until he was fired in 2003, after writing a column about Kiryat Gat and getting arrested in a demonstration the day the US invaded Iraq. In recent years he has spent six months in occupied Palestine as a volunteer for the International Solidarity Movement and the International Middle East Media Center. He can be reached at henry AT norr DOT com.

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