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Quartet deal on Palestinian aid very close, EU says

Written by: Staff
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BRUSSELS, June 16 (Reuters) The European Union agreed today on an aid scheme for Palestinians bypassing the Hamas-led government and said it was close to winning the backing of the United States and other Middle East peace brokers.

''The European Council has endorsed our proposal for a temporary international mechanism,'' European Commission spokeswoman Emma Udwin told a news briefing of an agreement reached by the bloc's 25 member states at a summit in Brussels.

She added the EU was now ''very, very close'' to getting the endorsement of the so-called Quartet of international Middle East peace brokers -- the United States, Russia, the United Nations and the European Union.

The plan covers essential supplies to the health sector and payments to health-care services providers, utilities including fuel, and cash allowances to cover the basic needs of the poorest sections of the population.

Both the EU and the United States suspended aid to the Palestinian Authority when Islamic militant group Hamas refused to recognise Israel and failed to renounce violence but they recognised last month an emergency scheme was needed to prevent the Palestinian territories sliding into chaos.

There have been signs that the Europeans were at odds with two key players -- Israel and the United States -- which have opposed payments of salaries. The EU has suggested allowances that would be exceptional, non-contractual payments.

Diplomats said the EU would not have approved anything likely to be blocked by other members of the Quartet.

US ENDORSEMENT EXPECTED The commission spokeswoman said the endorsement of the United States and other donors was expected in the next few days and the aim was to get assistance flowing by early July.

Aid will be channelled under a three-part structure, an EU statement said. Udwin said the EU's executive had proposed providing 100 million euros (6 million) for the mechanism, but she could not give a figure for its overall cost.

The World Bank's existing Emergency Services Support Programme will be expanded to cover essential supplies and allowances to the health sector, while the EU's Interim Emergency Relief Contribution will be beefed up to ensure uninterrupted supplies of utilities such as fuel.

The first two parts will be launched immediately, followed by a more complex ''Needs-based Allowance Programme'' sought by the Americans, that will seek to create a social safety net with direct payments into individual bank accounts based on needs.

The statement added that Palestinian President Mahmoud Abbas's office would act as an interface with donors, signing and authorising necessary documents.

The Commission said External Relations Commissioner Benita Ferrero-Waldner will visit the region next week to meet Abbas and Israeli Prime Minister Ehud Olmert to discuss the mechanism.

The statement said the mechanism could be used by Israel to channel funds from the estimated million a month in tax revenues it has been withholding since Hamas took power.

In a meeting with Ferrero-Waldner on Tuesday, Israeli Foreign Minister Tzipi Livni said there were ''differences'' on the plan and Israel would decide whether to release the Palestinian revenues once details were finalised.

REUTERS MP PC2241

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