EU vows to speed Palestinian aid; says Israel key

By Staff
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BRUSSELS, May 15 (Reuters) The European Union vowed today to get a new aid mechanism for the Palestinians in place as soon as possible, but said Israeli support was crucial and it appeared the United States would not take part.

EU External Affairs Commssioner Benita Ferrero-Waldner said she hoped the mechanism, proposed last week by the quartet of West Asia peace negotiators to aid Palestinians but bypass the Hamas-led government, could be put in place by June.

However, also speaking ahead of a meeting of EU foreign ministers in Brussels, EU foreign policy chief Javier Solana indicated it would not be possible for the mechanism to cover salary payments to all unpaid Palestinian Authority employees.

About 165,000 such employees have not received salaries for March and April, largely because Israel has withheld 55 million dollars in tax and customs revenues collected monthly on behalf of the Palestinians since the militant Islamist group Hamas -- which refuses to denounce violence -- came to power.

''We are well aware of the urgency of the situation in the Palestinian territories,'' Ferrero-Waldner told a news briefing.

''The issue is pressing but at the same time it is not so easy.

We have to get the parameters right and then we have to get the donors and the partners to accept what we will set up.'' Waldner said she hoped a donors' meeting could be held next week once the mechanism had been mapped out and that other donors, including the Israelis and the Arabs, would contribute.

''It is crucial for us that the Israelis resume transfers of tax and customs revenues,'' she said.

While Washington had backed the principle of setting up the temporary aid mechanism at the meeting of the Quartet -- which also includes Russia and the United Nations -- it was ''a different story'' whether they used it or not, Waldner said.

''I cannot give you any reason, but have to tell you that for the time being I don't think they will use the mechanism.'' WORLD BANK CONCERNS One of the proposals being considered is for a World Bank trust fund to direct aid to key sectors.

However, the Bank said in a recent memo that a prerequisite for operating a fund would be for the United States and Israel to provide ''explicit assurances'' to any agency, company or bank involved in the programme that they would not face sanctions.

Solana hinted that U.S. Congressional resistance might make it impossible for the World Bank to run the mechanism despite official support from the Bush administration.

''The US is supporting the mechanism as you know ... They have rules that are different to ours. Probably the Congress would be very much (more) restrictive on giving money to the Palestinians than we are.'' ''We have to talk to the World Bank and see if they want to be the agency in charge of the mechanism or not. There are other possibilities,'' he said without spelling them out.

Solana, asked whether the fund would also pay salaries, said: ''This is not decided. Very likely, salaries only related to only very basic needs such as schooling, hospitals etc.'' The EU, which announced a freeze in direct aid to the Palestinian Authority last month due to Hamas's refusal to recognise Israel and renounce violence, has been stung by charges in the Arab world that it is starving Palestinians.

Reuters SHB GC1650

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