Long-running talks between Israel and the Holy See aimed at reaching an agreement on fiscal and economic matters relating to Church institutions have reached their “final stage.”
But a signing is not imminent, according to the Catholic bishops of the Holy Land.
The Assembly of Catholic Ordinaries of the Holy Land made the remark in a June 12 statement at the end of a two-day plenary meeting of the bilateral permanent working commission between the Holy See and Israel at the Vatican.
The Holy See said in a separate statement that the June 11-12 negotiations took place “in a thoughtful and constructive atmosphere” and that the commission “took notice that significant progress was made” towards the conclusion of the agreement.
The commission will hold its next plenary meeting on Dec. 6 at the Israeli Ministry of Foreign Affairs.
The talks, which began in 1999, have been surrounded by much false optimism in the past, partly due to their complexity. They center on a de facto agreement based on a U.N. statute which states that the Church should be exempt from paying taxes on its property in the Holy Land; and, in fact, it has not done so since the state of Israel was founded.
But Israel has so far refused to offer a formal exemption, leaving the Church open to any summons to pay these taxes and therefore vulnerable to the whims of government officials.
Israeli officials are reluctant to give up these arbitrary powers and to formalize a tax exemption, which other religions in the country might also demand.
The Church is keen that these issues be speedily resolved to avoid Church institutions in Israel — especially schools and hospitals — possibly closing due to shortage of funds to pay for goods and services.
Initially, an agreement on these matters should have been reached two years after Israel and the Holy See signed the 1993 Fundamental Agreement, a treaty which formalized diplomatic relations between Israel and the Holy See.
But after a long hiatus, from 2002 to 2007, progress has been made because the commission began meeting more regularly.
But controversy also surrounded the meeting when, shortly before the talks, Palestinian officials voiced concerns about a possible concession by the Vatican on East Jerusalem and other territories occupied by Israel during the 1967 war.
Their fears were based on a copy of an alleged draft agreement being prepared for the talks, which could not be independently verified.
The Palestinians stressed that any recognition of Israel’s right to impose domestic legislation in the disputed territories with the Palestinians would violate the Fourth Geneva Convention, which, among other provisions, regulates the powers of an occupying force over the territory they control.
But Msgr. Ettore Balestrero, the Vatican’s lead negotiator with Israel in the bilateral commission, told Vatican Radio June 12 that the discussions on the Fundamental Agreement Between the Holy See and the State of Israel, signed in 1993, concern the “life, activities and fiscal regime of the Catholic Church in Israel” and that in the agreement “we wished to steer clear of territorial disputes.”
“We will not speak about East Jerusalem or places in the West Bank,” he reaffirmed.
Asked specifically about the Holy See’s position on East Jerusalem, the official replied: “The position of the Holy See has not changed. It was stated in the Basic Agreement between the Holy See and the PLO [Palestine Liberation Organization, signed in 2000]; it was repeated on various occasions and will be stated again in the overall agreement with the PLO, currently being worked on.”
Msgr. Balestrero was aware of the draft agreement and attributed the “confusion and alarm” to the “undue use of a working text which is outdated for some time and is, in any case, still being worked on.”
He stressed that, from the beginning of the talks, it was understood that any future agreement would include a list of individual properties belonging to the Holy See and some institutions of the Catholic Church in the Holy Land upon which Israel had introduced onerous measures for the proprietors.
“It is also true,” he added, “that some of these properties are in East Jerusalem or in the areas occupied in 1967. We aimed at resolving concrete problems.” But he said that “for quite some time” it has been decided that properties will be dealt with in the agreement “which are neither in East Jerusalem nor in the West Bank.” He explained that it is therefore “not exact” to state that under any agreement the Holy See “would be in violation of the Fourth Geneva Convention for the protection of civilians in time of war.”
The statement of the bilateral commission also included a word of thanks to the apostolic delegate to Jerusalem and Palestine, Archbishop Antonio Franco, and Israel’s ambassador to the Holy See, Mordechay Lewy. Both of them have played a key role, not only in furthering the work of the commission, but also strengthening Israeli-Holy See relations, the highlight of which was Pope Benedict XVI’s visit to the Holy Land in 2009.
The commission thanked the two diplomats, who are about to retire, for their “exemplary service.”

Edward Pentin writes from Rome.