BRUSSELS, Apr 20 (Reuters) The European Union is seeking alternative ways to distribute aid to the Palestinians which it is withholding from the Hamas-led government over the Islamist movement's refusal to recognise Israel.
French President Jacques Chirac and Spanish Foreign Minister Miguel Angel Moratinos said they would discuss with Palestinian President Mahmoud Abbas next week new ways to channel assistance for education, health and infrastructure projects.
The 25-nation EU, the biggest aid donor to the Palestinians, has temporarily suspended payments to and through Prime Minister Ismael Haniyeh's Palestinian government because it has not met the international community's three conditions of recognising Israel, renouncing violence and accepting past peace agreements.
Hamas has accused the EU of punishing the Palestinians for their democratic vote and making it impossible for the government to function -- charges denied by European officials.
''It would be both unfair and politically inept to make the Palestinian population pay the price (for voting for Hamas) ...
by stopping aid,'' Chirac told a news conference in Cairo with Egyptian President Hosni Mubarak yesterday evening.
''It is one of the subjects I will discuss with Abu Mazen (Abbas) in a few days -- that is, how to ensure that aid can be distributed to all Palestinians and under conditions which would be respectful of democracy,'' he said.
EU officials said Chirac's comments were in line with agreed policy and he was not backing away from the direct aid freeze.
Re-routing aid to circumvent Hamas would be a major focus of a meeting of the ''Quartet'' of international peace mediators -- the United States, the EU, Russia and the United Nations -- planned in New York on May 9, they said.
REALITY CHECK A phone call between Haniyeh and the winner of Italy's general election, Romano Prodi, on Tuesday raised some eyebrows in Brussels in the light of the EU's policy barring high-level contacts with the Hamas-led government.
An EU official noted Prodi had no government function yet.
Moratinos, a former European West Asian peace envoy, accused Hamas of distorting the facts about EU aid.
''We are not the guys that are letting down the Palestinians.
That is not true,'' he told Reuters in a telephone interview.
''The campaign that Hamas is presenting all over the world that due to the European Union suspension they are not able to run the country is their problem. They need a reality check.'' The Spanish minister, regarded as sympathetic to the Palestinians, said the Quartet's three conditions were standard requirements of any government and were reasonable.
''As Abu Amar (the late Palestinian leader Yasser Arafat) used to say, we are not asking for the moon,'' he joked.
Moratinos said the EU would try channel as much as possible of the frozen direct aid through other institutions.
''We are going to provide funds for education salaries, for health salaries. So that's the main concern and the concept of humanitarian assistance is very broad -- electricity, water, road construction, infrastructure,'' he said.
European Commission officials estimate about 20 million euros in direct EU aid is frozen so far as a result of the suspension, plus 17.5 million euros in payments through the World Bank towards Palestinian Authority salaries.
An EU official said the Quartet was looking to establish some sort of fund that could be disbursed to Abbas's office, and in which Israel would be urged to deposit the 55 million dollars a month in Palestinian revenues which it has frozen.
Abbas is due to visit Paris on April 27 and address the European Parliament in Strasbourg on May 16 -- part of European efforts to build up his authority vis-a-vis the Hamas-led government and press Israel to treat him as its interlocutor.
REUTERS SHB KN2021