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Olmert halts transfer of funds to Palestinian Authority

Chris McGreal

Hamas nominates Ismail Haniyeh for Prime Minister post

Jerusalem: Israel on Sunday froze contacts with what it called the ``terrorist'' Palestinian Authority, and put a block on the transfer of funds, the day after the swearing in of a Hamas-dominated Parliament.

``Israel views the rise of Hamas as a dangerous milestone that turns the Palestinian Authority into a terrorist authority,'' said the acting Prime Minister, Ehud Olmert. ``Israel will not hold contacts with the administration in which Hamas plays any part — small, large or permanent.''

The Cabinet decided to halt the transfer of funds, mostly about $50 million a month in tax and customs receipts, to the Authority and to appeal to foreign Governments to do the same until Hamas renounces violence and recognises Israel's right to exist.

Harsher steps on hold

U.S. Secretary of State Condoleezza Rice is on a tour of West Asia during which she is expected to press Arab Governments not to finance Hamas. Washington has also demanded that the PA repay $50 million in aid that could fall under Hamas control.

But the Israeli Cabinet stopped short of approving more drastic measures recommended by the military, including barring the entry of workers and goods from the Palestinian territories. Hamas on Sunday named Ismail Haniyeh, one of its leaders in the Gaza Strip, to be the next Palestinian Prime Minister. Mr Haniyeh said on Sunday that in talks to form the new Government ``everything will be on the table'', including demands by President Mahmoud Abbas for Hamas to abide by agreements with Israel.

At the swearing in of the new Parliament on Saturday in which Hamas holds 74 of the 132 seats, Mr Abbas warned Israel against using the Hamas victory as an excuse to continue its strategy to unilaterally impose borders and annex territory.

``(The election) should not be used to justify further aggression against our people, or as a pretext for blackmailing it. The Palestinian people should not be punished for its democratic choice that was expressed through the ballot box,'' he said.

Destabilising move

Palestinian analysts said the threat to cut ties with the PA is a largely meaningless sanction as the Israeli Prime Minister, Ariel Sharon, who is still in a coma, and Mr Olmert consistently refused to negotiate on the grounds that there is ``no partner for peace''. But the cut in funds to the cash-strapped PA could be destabilising, particularly if it is unable to pay its 130,000 workers. The U.S. and Israel say they will ensure that humanitarian aid continues to the Palestinian people without it falling under Hamas control.

Hamas is casting around for alternative sources of funding. The head of its political wing, Khaled Mashaal, is expected in Teheran to meet Iranian President Mahmoud Ahmadinejad, a move that will further infuriate Israel.

Mr Abbas told Parliament he requires Hamas to respect the Oslo accords with Israel that recognise the Jewish state.

- Guardian Newspapers Limited 2006

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