The interim agreement that Israel and the Palestinian Authority signed in September 1995 (Oslo 2)includes the most updated understanding on water that has been reached in the peace process framework. It is also more detailed than previous documents. The subject appears in article 40 of the Protocol on Civil Affairs (Annex 3). Israeli officials relate to it as a turning point at which responsibility for the water sector is transferred to the Palestinian Authority. However, this agreement did not significantly change the scope of Israeli control.
The point of departure for the understanding on division of water from the shared sources is that the quantity of water that Israel consumes, both within the Green Line and in the settlements, will not be reduced. According to this principle, any additional water for the Palestinians would be produced from previously unutilized sources, and not by re-distribution of existing sources. This means that almost every addition of water to the Palestinians under this agreement must come from the Eastern Aquifer of the West Bank, which, according to the agreement itself, is the only source that had not been fully utilized prior to signing of the agreement.
In the Oslo Accords, Israel recognized that the Gaza Strip and the West Bank comprise one territorial unit. However, the Interim Agreement stipulates that, regarding water resources, the Gaza Strip will constitute a separate water sector. Other than the small quantity that Israel undertook to sell, residents of the Gaza Strip will have to meet their needs solely from resources located within its borders, i.e., they are not allowed to obtain water from the West Bank. The failure of the Interim Agreement to re-distribute the water resources shared by the West Bank and Israel prevented any "surplus" of water in the West Bank that could increase the supply of water to the Gaza Strip. As a result, the severance of the Gaza Strip and the West Bank continued, further damaging the Gaza Aquifer because of the necessity to continue the over-extraction.
Pursuant to the Interim Agreement, the parties established the Joint Water Committee (JWC), the body charged with approving every new water and sewage project in the West Bank. The JWC is comprised of an equal number of representatives of Israel and the Palestinian Authority. All its decisions are made by consensus, and no mechanism is established to settle disputes where a consensus cannot be attained. This method of decision-making means that Israel is able to veto any request by the Palestinian representatives to drill a new well to obtain the additions stipulated in the agreement.
Israel's control of extraction of water from the shared aquifers is not limited to its veto power in the JWC over new drillings. If a well approved by the JWC is situated in Area C, which is under Israel's complete control, the High Planning Committee of the Civil Administration must also approve the project.