EU shifts conditions for Palestinian unity government

JERUSALEM, Jan 28 (Reuters) - The European Union has made a gesture towards accepting a Palestinian unity government that could include Hamas, a move it hopes can help heal a rift between the Islamists and their Western-backed rivals, Fatah.

EU foreign policy chief Javier Solana, speaking to reporters in Jerusalem on Wednesday, used new language to describe the conditions under which the bloc would be prepared to work with a new coalition, should Hamas and Fatah manage to agree to one.

Europe still insists Hamas stop fighting Israel, however.

The schism between Hamas and Fatah since the Islamists seized control of the Gaza Strip in 2007 has crippled efforts to establish a Palestinian state under a peace deal with Israel and poses a major hurdle to Western-funded reconstruction in Gaza following Israel's offensive against Hamas there this month.

Instead of spelling out three long-standing conditions, also adopted by the United States, that Hamas must renounce violence, recognise Israel and accept existing interim peace accords, Solana said only that a new Palestinian government that included Hamas should commit to pursuing a two-state solution.

Western powers froze aid to the Palestinian Authority in 2006 when Hamas won a parliamentary election and formed a government without agreeing to the three conditions.

They restored aid to the Authority when President Mahmoud Abbas, the Fatah leader, formed a new government without Hamas in the West Bank following Hamas's violent takeover in Gaza.

Europe supports efforts to reconcile the two factions, a process being mediated by Egypt. Palestinians are wary of forming a new unity government, however, if it would be subject to the same punitive sanctions as in 2006-07.

Solana said: "Whenever that (reconciliation) takes place, it has to be a team of people that will continue trying to obtain what is the desperation of so many people, which is two states, and two states that can live together."

He cited an Arab League proposal for a comprehensive regional peace that is conditional on creating a Palestinian state and an Israeli withdrawal from occupied territory.

"Those who can work in that direction, of course, they have to be helped and supported," Solana said.

It is unclear if the new European formula will help the Egyptian-sponsored reconciliation talks. Hamas has long rejected a two-state solution, though it has not ruled out a long-term truce, and it has refused to back the Arab initiative.

Egypt has proposed Feb. 22 as the date for the start of talks between Palestinian factions.

But Solana acknowledged reconciliation would be "very difficult". Hamas no longer recognises Abbas as president.

Senior EU diplomats said the bloc had not abandoned the three conditions, adopted by the Quartet of international powers mediating in the Middle East. But it was reducing the emphasis on them to give Abbas and Egypt more room to manoeuvre.

"It's a switch of emphasis," one diplomat said. "The conditions are the conditions. But we have to give some room to Abbas."

Hamas leaders have offered a long-term truce with Israel in return for a viable Palestinian state in the occupied West Bank, East Jerusalem and the Gaza Strip. But the group's 1988 founding charter calls for the destruction of the Jewish state. (Reporting by Adam Entous; editing by Alastair Macdonald)