UK sends first contribution to Palestinian fund

LONDON, Aug 11 (Reuters) Britain made its first direct contribution today to a new fund set up to allow foreign donors to aid Palestinians while bypassing their Hamas-led government.

Britain's International Development Secretary Hilary Benn said the 3 million pound donation would be sent to the Temporary International Mechanism (TIM) to fund medical services in the Palestinian territories.

The TIM is run by the World Bank and the European Commission to allow countries to contribute to Palestinian causes while bypassing the Palestinian Authority after Islamic group Hamas won control in an election in January.

''This is needed because donors cannot fund the government until they give up violence, recognise Israel's right to exist and sign up to previous peace agreements,'' Benn's ministry said in a statement.

Britain says it will provide up to 12 million pounds for the fund.

''While aid will make a vital difference to people's livelihoods, as long as the conflict continues, the suffering will go on. We need a long-term two-state solution for Israel and the Palestinian people, which we will continue to work towards,'' Benn said.

Palestinians want to set up a state on territories occupied by Israel in a 1967 West Asia war. The Palestinian Authority administers Palestinian affairs in most of those areas.

REUTERS DKA RAI2336