* IMF says it and other institutions going to Bahrain
* Palestinians to skip June 25-26 meeting, seeing pro-Israel bias
* U.S. hopes meeting is prelude to its Mideast peace plan rollout
By Rami Ayyub
JERUSALEM, June 5 (Reuters) - Global financial institutions will attend a U.S.-led conference on the Palestinian economy this month that the Trump administration has cast as an overture to its Middle East peace plan, the International Monetary Fund (IMF) said on Wednesday.
The efficacy of the June 25-26 meeting in Bahrain has been in doubt since Palestinian leaders and businesspeople said they would shun it over Washington’s perceived pro-Israel bias and inattention to their political demands.
Israel’s new election, an upsurge in cross-border fighting and the Palestinians’ resentment at the U.S. decision to recognise Jerusalem as Israel’s capital add to the complicated backdrop.
However, the IMF, which has been operating in the West Bank and Gaza since 1995, confirmed it and other global financial bodies would be present in Bahrain’s capital Manama.
“The IMF has been invited to the meeting and expects to attend, along with other international financial institutions,” a representative said, without naming the other bodies.
The IMF and other lenders and development banks have long played a stabilising role in the Israeli-Palestinian conflict, providing loans, credit guarantees, and policy advice to the Western-backed Palestinian Authority (PA).
The European Bank for Reconstruction and Development (EBRD) confirmed it would have “someone” representing it. The World Bank did not immediately respond to a request for comment.
White House senior adviser Jared Kushner this week concluded a trip to the Middle East and Europe aimed partly at drumming up support for the conference. Dubbed “Peace for Prosperity”, it is expected to unveil the economic part of Trump’s long-heralded peace plan for Israel and the Palestinians.
But Palestinian and Arab officials suspect the event may be a prelude to a U.S. push to jettison the “two-state” solution - a long-standing, international formula for an independent Palestinian state alongside Israel in the West Bank, East Jerusalem and Gaza.
The twin state blueprint has been the basis for decades of lending and technical support from global financial institutions, aimed at building the capacity of Palestinian government ministries and the private sector.
However, Kushner has said it would be a “high bar” for Palestinians to expect freedom from Israeli interference.
Chief Palestinian negotiator Saeb Erekat said that disqualifies Kushner from a peacemaking role.
Though Saudi Arabia and the United Arab Emirates plan to attend the Bahrain conference, they have assured the Palestinians they would not endorse a U.S. plan that fails to meet their main demands.
Israel’s government has not said whether it would attend.
Deputy foreign minister Tzipi Hotovely said in a weekend radio interview “Israelis” would be there, but it was unclear if that was official delegates or private business representatives.
Asked if she believed the event should be postponed given it would be shunned by the Palestinians, Hotovely told Tel Aviv station 102 FM: “No. There is no reason to ... Apart from them, everyone’s okay. Everyone’s in favour.” (Additional reporting by Dan Williams; Editing by Andrew Cawthorne)