The EU struggled on Monday to keep the outgoing Palestinian government financially afloat, unblocking a large aid package without binding itself to further financial assistance when Hamas takes office.
EU foreign ministers, meeting in Brussels, endorsed a decision by the European Commission to release US$142 million in funds to help the cash-strapped Palestinian Authority.
But they did not take any clear political stance on Hamas, which easily won last month's legislative elections, but figures, embarrassingly for the EU, on its terrorist blacklist.
The move was hailed as "a welcome step" in Washington by State Department deputy spokesman Adam Ereli.
The aid attribution "comes in the context ... of the Quartet statement" that expresses commitment toward the Palestinian people, he said.
In the Quartet statement on Jan. 31, he noted, the US, the EU, the UN and Russia, the main aid contributors to the Palestinian Authority, had also expressed commitment to supporting the interim government.
The EU disbursement "is a sign that we're all working together to prevent a collapse of the interim Palestinian Authority government and to support the Palestinian people," he said.
US Secretary of State Condoleezza Rice had spoken by telephone with the EU external relations commissioner, Benita Ferrero-Waldner, he added.
"The issue before the European Union is whether we resume aid to the existing interim authority, not to any Hamas government that has yet to be sworn in," British Foreign Secretary Jack Straw told reporters.
Ferrero-Waldner announced that the EU money would help the transitional Palestinian government meet its basic needs, such as energy bills and salaries, for about two months.
The EU's position has been vastly complicated by Israel's decision to unilaterally sanction the Palestinian Authority, depriving it of around US$60 million a month in taxes and customs duties.
"Certainly, Israel should pay this money because it's Palestinian money," Ferrero-Waldner said. "I believe that it's important politically that it be done."
The Palestinian Authority, led by President Mahmoud Abbas from the long-serving Fatah faction, is desperate for funds. It had to borrow money last month to pay the salaries of public servants.
Ferrero-Waldner said that around US$47 million would be used directly for the government's energy bills and there would be US$75.7 million in direct aid channeled through a UN agency for activities like education, health and social services.