UN envoy warns of danger in Palestinian aid cutoff

Cutting off aid to the Palestinian Authority even before a new Hamas government takes power could have dire consequences for the region, a top UN envoy warned world governments today.

A functioning Palestinian Authority is "an essential building block" of a Palestinian state and could trigger "dangers of many varieties" if allowed to collapse, Alvaro de Soto, the UN special envoy for the Middle East Peace Process, told the UN Security Council.

Although it is up to Israelis and Palestinians to set their policies, he said, "the international community also has an important role to play in helping the parties to make wise choices, and in ensuring that we keep sight of the overall goal of achieving a two-state solution by peaceful means."

The Palestinians depend on foreign aid totalling more than US$1 billion ($1.53 billion) a year.

All Palestinian donors including the United States and the 25-nation European Union are under pressure from Israel and domestic advocates to end aid to the Palestinian Authority after the Islamic militant group Hamas, which denies Israel's right to exist, won the January 25 Palestinian parliamentary election.

It is unclear how much money could potentially be withheld by international donors once Hamas formed a new government, a process that is still underway and could take some weeks.

The Middle East quartet of the United States, Russia, the European Union and the United Nations has called for measures to stabilize the finances of the caretaker Palestinian government while Hamas carries on its efforts to form a government.

The Israeli government has cut off tax transfers to the Palestinian Authority. The European Union has offered US$142 million in short-term aid, and Hamas officials say Iran has agreed to give the Palestinians enough money to make up for any aid cuts.

The international community must consider that blocking aid before a new government took office "might be interpreted by Palestinians and the Arab world as a whole as punishment of the Palestinian people for the way they voted on 25 January," de Soto said.

"Also we must keep in mind that the Palestinian Authority is not something that can be turned on and off like a light switch," he said.

If aid is cut off, Palestinians would lose their basic economic and social services, the estimated 140,000 Palestinian Authority employees and their families would lose their means of support, and Palestinian security forces could stir unrest, he said.

De Soto declined to speculate on whether Iran's offer of aid might enable Hamas to maintain a harder anti-Israel line. Western donors have said future aid would be conditional on Hamas recognizing Israel's right to exist and disarming.

But US Ambassador John Bolton said help from Iran, which he called "perhaps the world's largest state sponsor of terrorism," was not the right way to go, in Washington's view.

- REUTERS