March 12, 2009 / 3:49 PM / 10 years ago

U.S. to review aid if Palestinian unity deal reached

JERUSALEM (Reuters) - The United States could freeze hundreds of millions of dollars in aid to the Palestinian Authority if President Mahmoud Abbas and Hamas form a unity government that does not meet its conditions, diplomats said.

They said the Obama administration would review its ties to the Authority. How much aid, if any, it would get from Washington, and how it would be channeled, would depend on the make-up and policies of any new administration.

“We wouldn’t mind reconciliation if Hamas is willing to take certain steps,” one Western official said, referring to three long-standing demands Hamas recognize Israel, renounce violence and abide by interim peace deals with the Jewish state. “But if Hamas joins, we will have to go back and ask if we can give money to the Palestinian Authority. There are strings attached.”

Palestinian reconciliation talks resumed this week in Cairo.

There are deep divisions over the make-up and policies of a proposed temporary unity government to oversee reconstruction of the Hamas-ruled Gaza Strip after Israel’s January offensive and lay the ground for new parliamentary and presidential elections.

Hamas Islamists trounced Abbas’s secular Fatah faction in a 2006 parliamentary ballot and wrested control of Gaza 18 months later, prompting Israel to tighten its blockade of the coastal enclave, increasing hardships for its 1.5 million residents.

In contrast to the Bush administration, which sought to isolate Hamas and actively opposed unity talks, U.S. President Barack Obama’s government has voiced some encouragement to the idea of reconciliation. But the Obama administration has restated the three Western demands, rejected by Hamas.

Abbas, in contrast, supports peace talks with Israel, and since kicking Hamas out of a short-lived unity government in 2007 after its Gaza takeover, runs the Palestinian Authority from the Israeli-occupied West Bank with financial support from the United States, the European Union and other donors.

The Western officials, speaking on condition of anonymity, said the aid review could result in the suspension of direct U.S. budget support to the Palestinian Authority and of a training program for Abbas’s West Bank-based security forces.

But hundreds of millions of dollars in U.S. humanitarian assistance — which pass through United Nations aid agencies and non-governmental organizations rather than through the Palestinian Authority — would likely to go forward, as it did during the previous unity government in 2007.

STRINGS ATTACHED

The Western officials said the outcome of the U.S. review would depend in large part on who sits in any new Hamas-Fatah coalition and what platform it adopts.

U.S. aid to the Palestinians requires approval from Congress, where pro-Israel lawmakers wield enormous power.

U.S. officials have told Reuters that a purely technocratic government, free of active Hamas or Fatah members, would have to adopt a platform that would accommodate a two-state solution with Israel to be acceptable to the Obama administration.

If the cabinet included Hamas ministers, then the three Western demands, first set in 2006, would have to be met more explicitly, U.S. officials said.

The United States and the European Union want Salam Fayyad to remain prime minister. Abbas appointed him in June 2007 after Gaza’s takeover, but Fayyad announced on Saturday he was resigning at the end of the month.

Hamas has made clear it will not accept a technocratic government, let alone one that embraces the three conditions. It has also rejected putting Fayyad at its helm.

Diplomats said Fayyad has grown increasingly frustrated, both by a lack of progress in peace talks with Israel and by opposition within Fatah to his control over the Palestinian Authority’s purse strings.

Editing by Samia Nakhoul

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