Mon, May 08, 2006 - Page 6 News List

Britain argues for Hamas donor trust fund

AGENCIES , JERUSALEM AND GAZA

A proposed trust fund for donors to pay overdue Palestinian salaries would undercut Hamas, not strengthen it, says a British document meant to increase pressure on the US to drop objections to the plan.

Britain circulated the memo on the proposal, aimed at averting a collapse of basic services provided by the Palestinian Authority, to major donors ahead of a meeting tomorrow of the Quartet of Middle East mediators, Western diplomats said.

The four-page document ar-gues, in response to US efforts to block creation of such a fund, that it "will not undermine the diplomatic effort" to persuade Hamas to renounce violence, recognize Israel and abide by interim peace accords.

The US is concerned that allowing the international community to pay Palestinians' salaries would take pressure off Hamas, Western diplomats said.

But Britain argues that if Palestinians end up receiving crucial aid through channels other than Hamas, the Islamic militant group stands to lose "a big part of its street credibility and hence have an incentive to come closer to what the international community wants."

The British memo says Western donors can fund basic services through the Palestinian Authority even "while the Hamas government condones terrorist attacks against Israel" because the purpose of the trust fund is to give humanitarian support.

"Humanitarian aid to the Palestinian people should not be conditional on actions by Hamas," the document said.

But it adds that even if Washington agrees to go along with the plan, the proposed trust fund could take at least six weeks to get up and running.

The British trust fund proposal is similar to those outlined in recent days by the EU and France to ease a Palestinian salary crisis that followed the suspension of direct US and EU aid after a Hamas-led government took office in March.

In an earlier memo, Britain said its goal was to try to "mitigate the decline in living standards of the Palestinian people and reduce the possibility of domestic instability by sustaining delivery of basic services such as health and education."

Under the proposal, donors would put money into the trust fund, which would then move the money directly into a commercial bank account outside the Palestinian Authority's control.

The money in the fund would be used for pre-approved services, from workers' salaries to medical supplies.

On Saturday, Palestinian President Mahmoud Abbas and Prime Minister Ismail Haniyeh failed on Saturday to come up with a way to ease a financial crisis that threatens to bankrupt the Hamas-led government, officials said.

Nabil Abu Rdainah, an adviser to Abbas, said after four hours of talks between the two that the Islamic militant group had not agreed to make policy changes toward Israel that could alleviate an aid freeze by the US and Europe.

"To our great regret the international community is refusing to deal with us as a whole as long as the government does not change its position. And the people are paying the price," Abu Rdainah said, alluding to Hamas' refusal to accept past peace agreements with Israel or recognize the Jewish state.

"The president has been seeking to find the mechanism to end the financial crisis," Abu Rdainah said after the talks held in Gaza City.

"But unfortunately a mechanism has not been reached and there are still obstacles," he said.

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