EU vows to maintain pressure on Hamas over aid

SALZBURG, Austria, Mar 10 (Reuters) The European Union vowed today not to soften demands that Hamas recognise Israel and renounce violence as its foreign ministers debated the future of much-needed aid to the Palestinians.

The 25-nation bloc has provided short-term assistance but officials say funding could be jeopardised unless Hamas, which is on an EU list of terrorist groups and whose charter commits it to the destruction of Israel, moderates its stance.

Ministers meeting in the Austrian city of Salzburg held back from any immediate decisions on aid currently worth 596 million dollars a year, but called on Hamas to give clear signs it was committed to change.

''Without a statement on that we will not work with a Hamas-led government. It is absolutely clear this can't be hot air,'' said German Foreign Minister Frank-Walter Steinmeier.

''We have to repeat over and over again that Hamas must recognise Israel, and that we cannot make progress with violence,'' said Luxembourg Foreign Minister Jean Asselborn.

EU officials said the bloc was watching for any shift in Hamas's stance during and after a March 28 summit of the Arab League in Khartoum, a potentially key date on which Israel is to hold general elections.

EU External Relations Commissioner Benita Ferrero-Waldner acknowledged the funding question could not go unresolved for ever, but pointed to comments by President Mahmoud Abbas signalling that any policy shift by Hamas might be gradual.

''We cannot exclude that it is seriously thinking about how to respond to the situation in future,'' she said, suggesting any change in Hamas policy could be ''step by step''.

''EMBRYO OF A STATE'' Ministers studied a paper drafted by the executive European Commission and EU foreign policy chief Javier Solana which officials said simply laid out existing EU aid arrangements.

Just under half of that aid goes through the Palestinian Authority at present, the tranche which would be most obviously threatened if the bloc froze contacts with the PA leadership.

Around a fifth of the total goes towards humanitarian projects, 22 per cent on assistance to refugees via the U N refugee agency and the rest to NGO projects.

Options being canvassed include re-routing aid through Abbas, creating a new disbursement agency independent of the Palestinian Authority, or using non-governmental groups.

The EU will give Abbas, whose stock has risen in Europe as a rampart against Hamas, a political boost next week when he visits Vienna, Strasbourg and Brussels.

''We must find ways to support the Palestinian people,'' EU foreign policy chief Javier Solana said before the meeting.

''We want to see to it that we can maintain what has taken us so many years to build up -- namely, a Palestinian Authority which is the embryo of a state which we must complete, and which one day will exist,'' he told the Austrian daily Der Standard.

A so-called Quartet of international mediators -- the United States, the EU, Russia and the United Nations -- says Hamas must recognise Israel, renounce violence and respect past agreements.

Washington and Israel cut funds to the Palestinian Authority when Ismail Haniyeh of Hamas was nominated as prime minister.

But the 25-nation EU has given the Palestinians a short-term lifeline, releasing 143 million dollars in aid that mostly bypassed the Palestinian Authority.

REUTERS KD KN2238