EU's Palestinian aid deal receives guarded welcome

Hamas and Israeli officials have given a qualified welcome to an international plan to renew financial assistance to the Palestinian people while continuing to boycott the Hamas government.

The plan calls for a "needs-based allowance programme" with the aim of creating a "social safety net". But the 160,000 public servants and security personnel who have been waiting for their pay cheques since February are not expected to benefit.

The "temporary international mechanism", which will channel the money through Mahmoud Abbas, the Palestinian President, was drawn up by the European Union and endorsed on Saturday by the United States, United Nations and Russia, the EU's partners in the peace-making Quartet. It will be presented today to Israel and Mr Abbas by Benita Ferrero-Waldner, the European commissioner for external relations.

Mr Abbas leads Fatah, which recognises Israel and is committed to a two-state solution. Hamas, which won parliamentary elections in January, is being ostracised because it still seeks a Muslim state from the Jordan to the Mediterranean. It has refused the Quartet's demands that it should recognise Israel, renounce violence and endorse past agreements.

Ghazi Hamad, a spokesman for the Hamas government, said: "We welcome the European idea as a positive step. But we hope that in the future the international community will change its position and coordinate the assistance through the Ministry of Finance.

"President Abbas may want to control the financial track in the Palestinian Authority, but it will be very difficult for the international community to ensure accountability without us."

Mark Regev, a Foreign Ministry spokesman, said: "Israel is receptive to assistance that will bypass the Hamas-led government, giving it neither legitimacy nor recognition. No one on our side has an interest in seeing hardship in the Palestinian territories."

Under Ms Ferrero-Waldner's proposal, Europe will remain the principal donor. The United States is not expected to contribute, though Brussels hopes others will. Emma Udwin, the commissioner's spokeswoman, said Europe was considering an initial allocation of about $126m (£68m). She said: "We Europeans are determined to play our part in preventing a humanitarian crisis in the Palestinian territories. But there can be no business as usual with a government that has not yet accepted the fundamental principles of peace."

The aid will be channelled through a three-part structure, with strict controls. Europe hopes it will start by early next month. Two of the frameworks are already in place. The World Bank's emergency services support programme will be expanded to cover essential supplies in the health sector.Europe will reinforce its "interim emergency relief contribution" to ensure uninterrupted supplies of fuel and other essential items.