Mitt Romney told Jewish donors in Jerusalem on Monday that their culture is part of what has allowed Israel to be more economically successful than the Palestinians, outraging Palestinian leaders who called his comments racist and out of touch. His campaign later said his remarks were mischaracterized.
"As you come here and you see the GDP per capita, for instance, in Israel which is about $21,000, and compare that with the GDP per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice such a dramatically stark difference in economic vitality," Romney told about 40 wealthy donors at a breakfast at the luxurious King David Hotel.
Romney, seated next to billionaire casino owner Sheldon Adelson at the head of the table, told donors at his fundraiser that he had read books and relied on his own business experience to understand why the difference is so great.
The Republican presidential candidate said some economic histories have theorized that "culture makes all the difference."
"And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things," Romney said, citing an innovative business climate, the Jewish history of thriving in difficult circumstances and the "hand of providence." He said similar disparity exists between neighboring countries, like Mexico and the United States.
The reaction of Palestinian leaders to Romney's comments was swift and pointed.
"It is a racist statement and this man doesn't realize that the Palestinian economy cannot reach its potential because there is an Israeli occupation," said Saeb Erekat, a senior aide to Palestinian President Mahmoud Abbas.
"It seems to me this man (Romney) lacks information, knowledge, vision and understanding of this region and its people," Erekat added. "He also lacks knowledge about the Israelis themselves. I have not heard any Israeli official speak about cultural superiority."
As criticism mounted while Romney traveled to Poland, campaign spokeswoman Andrea Saul said: "His comments were grossly mischaracterized." The Republican's campaign contends Romney's comparison of countries that are close to each other and have wide income disparities — the U.S. and Mexico, Chile and Ecuador — shows his comments were broader than just the comparison between Israel and Palestine.
The economic disparity between the Israelis and the Palestinians is actually much greater than Romney stated. Israel had a per capita gross domestic product of about $31,000 in 2011, while the West Bank and Gaza had a per capita GDP of just over $1,500, according to the World Bank.
Romney, in comparing the Israeli and Palestinian economies, made no mention of the fact that Israel has controlled the West Bank, Gaza Strip and east Jerusalem since capturing them in the 1967 war. Israel withdrew from Gaza in 2005, but continues to control access, and has enforced a crippling border blockade since the Islamic militant Hamas seized the territory in 2007.
In the West Bank, Israel retains overall control, and Palestinians only have limited self-rule. Israel controls all border crossings in and out of the West Bank, and continues to restrict Palestinian trade and movement.
The World Bank and the International Monetary Fund have said repeatedly that the Palestinian economy can only grow if Israel lifts those restrictions.
"It's Israeli occupiers and Palestinians under occupation, and that's why Palestinians cannot realize their potential," Erekat said.
It's true that Israel has logged tremendous achievements, said Abraham Diskin, a political science professor at the Inter-Disciplinary Center outside of Tel Aviv. But "you can understand this remark in several ways," he added. "You can say it's anti-Semitic: `Jews and money."'
The breakfast with top donors — including Adelson, New York Jets owner Woody Johnson and hedge fund manager Paul Singer — concluded Romney's visit to Israel, the second leg of a three-nation overseas tour designed to bolster the his foreign policy credentials.
Standing on Israeli soil for the first time as the GOP's presumptive presidential nominee, Romney on Sunday declared Jerusalem to be the capital of the Jewish state and said the United States has promised never to "look away from our passion and commitment to Israel."
The status of Jerusalem is a critical issue in peace talks between the Israelis and the Palestinians.
During his visit to Israel, Romney did not meet with Abbas or visit the West Bank. He held a brief meeting with Palestinian Prime Minister Salam Fayyad.
Romney's campaign says his trip abroad, which began in England last week, is aimed at improving the former Massachusetts governor's foreign policy experience through a series of meetings with foreign leaders. The candidate has largely avoided direct criticism of U.S. President Barack Obamawhile on foreign soil.
The Jerusalem fundraiser, however, was a political event that raised more than $1 million for Romney's campaign. It marks at least the second finance event during his tour. The first, in London, attracted about 250 people to a $2,500 per person fundraiser.
Both presidential candidates have aggressively courted American donors living abroad, a practice that is legal and has been used for decades.
Romney's declaration that Jerusalem is Israel's capital was keeping with claims made by Israeli governments for decades, even though the United States, like other nations, maintains its embassy in Tel Aviv.
His remarks on the subject during his speech drew a standing ovation from his audience, which included Adelson, the American businessman who has promised to donate more than $100 million to help defeat Obama.
Adelson was among a several donors who flew to Israel for a day of sightseeing with Romney in addition to private meetings with top Israeli officials.
A group of donors also met with a top aide to President Benjamin Netanyahu, one donor said on the condition of anonymity to discuss private meetings.
Romney met with Netanyahu and other leaders before his speech Sunday. He also visited the Western Wall, Judaism's holiest site, where he was mobbed by worshippers.
In his remarks, Romney steered clear of overt criticism of Obama, even though he said the threat of a nuclear-armed Iran "has only become worse" in the past five years.
Romney flew to the Middle East from Britain, where he caused a stir by questioning whether officials there were fully prepared for the Olympic Games.
A goal of Romney's overseas trip is to demonstrate his confidence on the world stage, but his stop in Israel also was designed to appeal to evangelical voters at home and to cut into Obama's support among Jewish voters and donors. A Gallup survey of Jewish voters released Friday showed Obama with a 68 percent to 25 percent edge over Romney.
Romney and other Republicans have said Obama is insufficiently supportive of Israel.