Aid plan draws muted Palestinian response

RAMALLAH, West Bank - Palestinians gave a muted welcome today to an international emergency aid plan bypassing the Hamas-led government and keeping an overall funds freeze intact.

"We hope for an expeditious implementation," Palestinian chief negotiator Saeb Erekat said, after President Mahmoud Abbas called the "temporary mechanism" a good step but inadequate.

Under the plan agreed by the United States, European Union, United Nations and Russia yesterday, money would flow by early July to cover Palestinian health and utilities costs.

But a crippling overall suspension of funds imposed by international donors after Hamas, an Islamic militant group dedicated to Israel's destruction, came to power in March, will remain in place.

Some 165,000 Palestinian government employees have gone unpaid for the past three months. Hardship has deepened in the occupied West Bank and in Gaza amid inter-factional violence, raising international fears of a plunge into total chaos.

Hamas, which won election in January, has refused to meet US, EU and Israeli demands to recognise the Jewish state, renounce violence and accept past interim peace deals.

The temporary aid, bypassing the Hamas government, will provide essential supplies to the health sector, payments to health-care providers and utilities, and cash allowances to meet the basic needs of the poorest sections of the population.

"I welcome the Quartet decision ... at the same time, I can say that this is not the way to do it," said Aziz Dweik, speaker of the Palestinian parliament and a Hamas leader.

"The Quartet is really supposed to deal with the Palestinian government because it is an elected government," he said.

An EU spokeswoman said the EU's executive had proposed providing €100 ($206.27) million for the programme.

"Parts one and two of the mechanism will be launched immediately, with the aim of making payments to individuals by early July," EU External Relations Commissioner Benita Ferrero-Waldner said in a statement.

She said she would travel to the region tomorrow and Wednesday to discuss the aid programme with Israeli Prime Minister Ehud Olmert, Foreign Minister Tzipi Livni, and Palestinian President Mahmoud Abbas.

But Ferrero-Waldner will not meet any member of the Hamas-led government.

The international peace brokers, known as the Quartet, said they hoped Israel also would contribute. Israel has been withholding tax revenue transfers, about US$55 million a month, to the Palestinian Authority since Hamas took office.

In violence early this morning, a car exploded in the Gaza Strip, witnesses said. Palestinian security officials were investigating the cause of the explosion in which the occupants escaped unharmed. The Israeli army said it was not involved.

Israeli Foreign Ministry spokesman Mark Regev said Israel would have no comment on the aid plan until it is formally presented by Ferrero-Waldner on Monday.

In a challenge to Hamas and in an apparent bid to ease international sanctions, Abbas has set a July 26 referendum over a manifesto envisaging a two-state solution to the conflict with the Jewish state.

- REUTERS