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.