WORLD / Top News

US aid now likely after Hamas sets govt
(Reuters)
Updated: 2006-03-24 15:43

U.N. officials say they are concerned that a cut-off in assistance to a Hamas-led Palestinian Authority could trigger a humanitarian crisis and hobble the very institutions that would be needed to form any future Palestinian state.

In a recent report to donors, the World Bank said a sharp cut in funding from donors could push the West Bank and Gaza into a deep economic depression. Israel has already frozen tax revenue transfers in a bid to isolate Hamas.

As many as one in four Palestinians is dependent on wages from the Palestinian Authority, prompting warnings from international Middle East envoy James Wolfensohn that violence could break out if salaries are not paid.

The U.S. delay will have little practical effect on the Palestinians since the Bush administration has already suspended its aid programs pending the outcome of its policy review, launched after Hamas's January 25 election victory.

The Quartet has said Hamas must recognize Israel, renounce violence and accept past peace agreements or risk losing aid.

U.S. officials said the aid review would take more time because administration officials wanted to make sure that the programs will not violate U.S. law, which prohibits assistance to Hamas.

Bush administration policy also bars American officials from having direct contact with members of Hamas.

Donor countries are looking at several options to avert the collapse of the Palestinian economy without providing aid to Hamas itself.

One proposal calls for setting up a trust fund that would funnel humanitarian aid to the Palestinians and pay salaries directly to 140,000 Palestinian Authority employees.

Hamas has masterminded nearly 60 suicide bombings against Israelis since a Palestinian revolt erupted in September 2000. But it has largely observed a truce declared early last year.


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