Pressure won't hasten fall of Hamas Israel army

JERUSALEM, May 23 (Reuters) Economic pressure will not hasten the fall of the Hamas-led Palestinian government, the head of Israel's army was quoted as saying today.

Israel, the United States and European Union have held up vital aid and funding for the Palestinian Authority to try to get the Islamist group to recognise Israel's right to exist, renounce violence and accept interim peace deals.

Hamas officials accuse Washington of trying to bring down the elected government, which took office in March.

''There is a poor economic situation,'' Lieutenant-General Dan Halutz was quoted by an official as telling the Israeli parliament's foreign affairs and defence committee.

''The economic pressure, however, will not hasten the downfall of Hamas.'' Palestinians complain of a humanitarian crisis because of the lack of funding, in particular because of the inability of the government to pay salaries to 165,000 workers.

The economic difficulties have compounded a power struggle between Hamas and President Mahmoud Abbas, seen as a moderate, whose Fatah-dominated forces have clashed with Hamas recently in the Gaza Strip.

Halutz said the smuggling of arms and ammunition into the Gaza Strip had increased sharply both by land and sea, but he said that he did not believe the confrontation would reach the level of civil war.

''Neither side in the dispute is interested (in that),'' he said.

Reuters SI DB2056