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Hamas officials more cautious about salaries

Written by: Staff

GAZA, May 2 (Reuters) The Hamas-led Palestinian Authority today backed away from assertions that funds would arrive soon to pay overdue government salaries, accusing the United States of interfering with its plans.

The Hamas-led government has yet to pay March and April wages to 165,000 employees. It has been unable to receive funds from abroad because banks fear sanctions by the United States, which regards Hamas as a terrorist organisation.

Earlier this week Palestinian officials expressed high hopes of easing the salary crisis by having the Cairo-based Arab League transfer funds directly into the bank accounts of government employees.

But Palestinian Prime Minister Ismail Haniyeh was more cautious today.

''We know that there are obstacles, maybe by the American administration, in front of even the new mechanisms we have thought about and the mechanisms we may think to use,'' Haniyeh told reporters.

''Our call from the heart of Palestine is to the Arab League and to Arab leaders to intervene to end this suffering and to end the American intervention,'' he said.

Cabinet minister Atef Odwan also appeared increasingly wary -- one day after predicting that Arab League money would start arriving in employee accounts before the end of this week.

''I am afraid that these banks will not be able to ignore or tolerate the American pressure; then that will lead to a delay,'' Odwan told Reuters. ''The United States ... wants to bring down the government.'' The Hamas-run Finance Ministry had even sent to the Arab League a list of employee names and bank details.

The change in tone came as the Bush administration stepped up pressure on banks not to transfer funds to the new government.

Western diplomats said the United States was now trying to block Arab and European proposals to pay salaries directly into workers' accounts.

Reuters SI GC2144

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