Middle East peace brokers meet on Tuesday to hammer out how to deal with a Hamas government, with pressure growing to pay beleaguered Palestinian Authority workers and Washington trying to hold its tough line on direct aid.
Several proposals, including a French one to allow the World Bank to channel funds to pay salaries, are expected to be presented at the meeting in New York of the so-called quartet of powers handling the Middle East -- the United States, Russia, the European Union and the United Nations.
The Bush administration says it will listen to proposals over how to pay 160,000 unpaid government employees but is unlikely to stray from its strategy of isolating Hamas until the militant group renounces violence, recognizes Israel and agrees to previous deals between Palestinians and Israelis.
‘The principle for us remains the same. We want to address the humanitarian needs of the Palestinian people, but we are not going to provide money to a terrorist organization,’ State Department spokesman Sean McCormack said.
But European, U.N. and other diplomats hope the United States will take a more practical approach as does Russia, which has also broken with Washington's total isolation policy by meeting directly with Hamas.
‘What we hope is that the United States might soften their stand and take up the World Bank option to pay salaries,’ said one Western diplomat, who asked not to be named because the issue was so sensitive.
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He said the greatest fear was that by not paying salaries, the Palestinian ministries would crumble, making it far more difficult to rebuild the country later.
After Hamas won Palestinian elections in January and formed a government in March, the United States and the European Union cut off direct financial aid for the Palestinian Authority.
The World Bank has warned donors the financial crisis gripping the Palestinian Authority since Hamas won was deeper than it first thought and could render the West Bank and Gaza ungovernable.
The authority has been unable to receive funds from abroad because local, regional and international banks fear sanctions by the United States, which regards Hamas as a ‘terrorist’ organization.
Before meeting in private, the quartet will hear from the foreign ministers of Saudi Arabia, Egypt and Jordan who are also concerned that cutting off aid will lead to the financial collapse of the Palestinian government and boost violence.
Arab nations are pushing for the French proposal or for salaries to be paid via the office of President Mahmoud Abbas whose Fatah Party lost to Hamas in January elections.
In addition, the Arab league has offered a plan to deposit donor funds directly into the accounts of government workers but this has been thwarted by Washington.
‘The U.S. position at this point is too rigid,’ said Ned Walker a former U.S. ambassador to both Egypt and Israel.
But Walker stressed the United States was unlikely to take any major decisions until after President George W. Bush has met later this month with new Israeli Prime Minister Ehud Olmert as he would want to get his opinions on how to proceed.