US threatens aid cut over Palestinian bid for state

The United States has said it will cut aid to the Palestinians if they proceed with a unilateral bid for statehood at the UN in September, chief Palestinian negotiator Saeb Erekat said yesterday.

Israel and the US strongly oppose the Palestinians' UN plan, saying that Palestinian statehood should only be achieved through negotiations. They say a Palestinian state must emerge from Israeli-Palestinian talks, which have been stalled for almost a year.

Mr Erekat said the US Consul-General in Jerusalem, Daniel Rubinstein, told him yesterday the US will take "punitive measures" if the Palestinians proceed with seeking UN recognition of statehood. Mr Erekat said Mr Rubinstein warned the US will stop granting the Palestinians an annual aid package of $470m (£288m).

"The American Congress will take punitive measures against the Palestinian Authority including halting American assistance," Mr Erekat quoted the consul-general as saying.

The US consulate had no immediate comment. The UN vote is largely symbolic but the Palestinians believe it will send a powerful message to Israel. The Palestinians say they are assured non-member state status if they turn to the General Assembly.

They plan mass demonstrations across the West Bank and abroad to coincide with the September UN General Assembly session, which they hope will give official endorsement for their state. The statehood initiative reflects frustration with stalled Israeli-Palestinian peace negotiations.