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UN cautions on cutting Palestinian aid

A Palestinian woman maneuvers a sword thrust into a German flag during a protest against the EU, the US and Israel sponsored by Hamas and held at the Islamic University in the West Bank city of Hebron on Tuesday. PHOTO: EPA

The UN's Middle East envoy warned on Tuesday that bankrupting the Palestinian caretaker government could be seen by Palestinians and Arabs as punishment for Hamas' election victory and could shake the already unstable Middle East peace process.

In a report to the UN Security Council, Alvaro De Soto said that failing to fill the gap in aid to an indebted Palestinian government during the caretaker period could alter a recent "evolution" of the incoming Hamas government.

The Palestinian Authority's financial condition is expected to become even more shaky now that Israel has decided to halt payments of the nearly US$55 million a month it collects in taxes and tariffs for the Palestinians in response to the militant Islamic group's victory in Jan. 25 elections.

During this interim period before the formation of the new government, De Soto said, "we should be alert to the danger that cutting off assistance ... might be interpreted by Palestinians and the Arab world as a whole as punishment of the Palestinian people for the way they voted."

De Soto warned that if the Palestinian Authority "is allowed to collapse or is sacrificed, then with it may go hopes of achieving a Palestinian state in a reasonable timeframe."

"There are dangers of many varieties here, including a human problem of stopping basic services to the population and the ability of the Palestinian Authority to pay salaries," he said afterward.

An estimated 130,000 civil servants who work for the Palestinian Authority and 67,000 security personnel could be left unpaid if the estimated budget deficit of US$260 million is not covered, according to De Soto.

De Soto said Hamas had "clearly undergone an evolution of sorts" in maintaining an overall ceasefire and participating in elections which it had previously rejected.

"But it is too early to say whether that evolution is irreversible, and whether it will continue in the right direction," he said.

"The choices Hamas makes are the single most important variable that will shape the future of the conflict," De Soto said.

He reiterated Secretary-General Kofi Annan's view that "it will take time for clarity to emerge."

The UN envoy called for continued adherence to the Arab Peace Initiative and the deal's principles of non-violence and recognition of Israel's right to exist.

De Soto expressed hope that the new Hamas-led government "will commit to those principles, not because of the appearance of pressure from outside, but because the Palestinian people have a right to expect that their new government will address their aspirations for peace and statehood."

He welcomed the EU's announcement on Monday that it will provide US$143 million of emergency assistance to the caretaker government and called on other international donors to do their part.

But he did not believe the EU aid could fully solve the problem.

It was unclear whether the EU or the US would make good on threats to cut all non-humanitarian aid once Hamas forms a new government. The EU, US and Israel have all demanded that Hamas renounce violence and recognize Israel's right to exist.

During a trip to Tehran last week by Hamas political leader Khaled Mashaal, Iran offered to help the Palestinians compensate for any cut in Western aid.

"I don't think assistance from Iran is the right way to go," US Ambassador John Bolton said when asked about the offer on Tuesday.

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