EU meets on aid to Palestinians, policy on Hamas

SALZBURG, Austria, Mar 10 (Reuters) The EU meets today on how to keep providing much-needed economic aid to the Palestinians while putting pressure on a future Hamas-led government to change the militant group's stance on Israel.

The European Union has kept up short-term aid but officials warn funding could soon be jeopardised unless Hamas, on the bloc's list of terrorist groups, recognises Israel and renounces violence. Hamas's charter calls for Israel's destruction.

Options to be discussed by EU foreign ministers include re-routing some aid through Palestinian President Mahmoud Abbas, possibly creating a new disbursement agency independent of the Palestinian Authority, or using non-governmental organisations.

Diplomats say ministers may also consider continuing limited payments to the Palestinian Authority, at least for a trial period, to give Hamas -- which scored a landslide win in January elections -- an incentive to change its stance once in office.

The executive European Commission and EU foreign policy chief Javier Solana will present a paper reviewing different forms of EU assistance to the Palestinians, but officials said no concrete decisions were expected for the time being.

''We will be in wait-and-see mode until the formation of the new Palestinian government,'' said Solana's spokeswoman Cristina Gallach. ''There will be a reaffirmation of our existing principles and I do not expect any alteration of that line.'' INTERNATIONAL MEDIATORS A so-called Quartet of international mediators -- the United States, the EU, Russia and the United States -- says Hamas must recognise Israel, renounce violence and respect past agreements.

The United States and Israel cut off funds to the Palestinian Authority when Ismail Haniyeh of Hamas was nominated as prime minister.

But the 25-nation EU gave the Palestinians a short-term lifeline, releasing 120 million euros (3 million) in aid that mostly bypassed the Palestinian Authority.

Hamas leaders have been touring Arab and other countries seeking support. Hamas said yesterday it would send a delegation to Saudi Arabia.

The two-day EU meeting in Salzburg will shift focus tomorrow to the Balkans.

The ministers are widely expected to tread a fine line between telling countries in the region their hopes of joining the bloc are intact, while appeasing popular scepticism about enlargement within the EU.

In 2003, the EU promised Albania and the countries that emerged from former Yugoslavia -- after three Balkan wars in the 1990s -- that their future lay in the bloc if they proved serious about economic and political reform.

But the European parliament, France and Germany have said the EU cannot enlarge beyond the pending entry of Romania and Bulgaria until it resolves its institutional future after French and Dutch rejections last year of a proposed EU constitution.

A draft resolution for the Salzburg meeting includes a reference to the EU's ''absorption capacity'' -- a code for insisting the bloc can choose to reject a possible member if it feels unable to absorb the country.

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