The United States and the European Commission suspended aid to the new Hamas-led Palestinian government on Friday, pushing the Palestinian Authority closer to financial collapse.
The State Department, making its announcement, said it would boost humanitarian aid to the Palestinians through U.N. agencies to avoid widespread distress in the West Bank and Gaza Strip, but the United States would not fund an organization committed to the destruction of Israel.
Quoting a statement by Secretary of State Condoleezza Rice, spokesman Sean McCormack said the Palestinian Cabinet must meet terms laid out by the quartet -- the United Nations, the United States, the European Union and Russia.
‘The path back to the road map is clear: acceptance of the three principles. If it accepts the Quartet principles or a new government comes to power that accepts them, funding can be restored,’ the statement said.
The three principles are that Hamas must renounce violence, recognize Israel's right to exist and express clear support for the Middle East peace process.
In Brussels, the European Commission said it had halted aid payments to the Palestinian government.
‘The problem is that they punish the Palestinian people, the Palestinian citizens and the Palestinian families. No one can accept such a kind of punishment,’ said Palestinian President Mahmoud Abbas, who heads the Fatah movement that recognizes Israel.
‘We urge the international community to be understanding and continue to provide aid.’
Hamas, a fundamentalist Islamic organization that has carried out many suicide bombings in Israel, won a sweeping victory in Palestinian parliamentary elections in January but did not formally take over the government until last week.
Facing an immediate financial crisis, Hamas is scrambling to find ways of paying 140,000 workers employed by the Palestinian Authority who support about a third of the population in the territories.
HAMAS ASSAILS FREEZE
Palestinian Prime Minister and senior Hamas leader Ismail Haniyeh assailed the aid cuts as unjust.
‘They are hasty decisions and they are unjust to the Palestinian people and they represent the punishment to the Palestinian people for their democratic choice,’ he said.
‘Whoever thinks that by these decisions he will besiege the government is wrong.’
But U.S. Assistant Secretary of State for Near Eastern and North African Affairs David Welch, said, ‘We believe that Hamas, as a government, is going to have great difficulty meeting the aspiration of the Palestinian people.’
Hamas has appealed to Arab states and Iran to fill the shortfall, but has not even been able to find a bank willing to handle its finances.
Even before the aid cutoff, many Palestinians struggled to subsist in an economy suffering from widespread poverty, high unemployment and rife with corruption.
Israel has stopped turning over about $50 million a month in taxes and customs revenue it collected on behalf of the Palestinians under previous agreements and its banks have begun cutting ties with the Palestinians.
Palestinian Foreign Minister Mahmoud al-Zahar warned the EU that cutting aid would destroy its credibility and could lead to boycotts of European interests in the Islamic world.
‘I am afraid it may wreck the credibility of the European Union in the Arab and Islamic world,’ Zahar told Reuters.
The EU has been the main donor to the Palestinian Authority since its creation under the 1993 Oslo peace accords.
About 30 million euros ($35 million) in direct government aid was currently in the pipeline, an EU official said.
Diplomats said the European freeze covered all direct aid to the Palestinian government and payment of public employees' salaries with EU funds through the World Bank, but not humanitarian aid through international and non-governmental organizations.
But the charity Oxfam warned that NGOs did not have the capacity to run health and education services and cutting aid would deprive the Palestinian population of these services.
‘The Palestinian Authority is responsible for (these services) and therefore donors must keep funding it,’ Jeremy Hobbs, director of Oxfam, said in a letter to the EU.
(Additional reporting by Paul Taylor in Brussels and Paul Eckert in Washington)