Europe seen easing, not ending Palestinian embargo

JERUSALEM/BRUSSELS, Sep 13: European states are willing to start easing an embargo of the Hamas-led Palestinian government if a new unity administration takes steps toward meeting international demands, diplomats said today.

But the new government would need to be far more explicit in renouncing violence, recognising Israel and abiding by interim peace deals if it hoped to restore full diplomatic and economic ties with Europe, they said.

In Brussels on Friday, EU foreign ministers are expected to back a three-month extension to a temporary aid mechanism set up to channel essential funds to Palestinians while bypassing Hamas, EU diplomats said.

Resuming some diplomatic contacts would be the first step toward easing the embargo now that Hamas and moderate President Mahmoud Abbas have agreed to set up the unity government.

But the diplomats cast doubt on prospects for a quick resumption in direct aid to the Palestinian Authority that might ease the crippling economic damage the embargo has brought.

They said EU states would first need to assess the new cabinet and its policies, a process that could be delayed by objections by the United States and Israel as well as the time it takes the Palestinians to put together a government.

''We can't go all the way, but we can go part of the way,'' said one senior European diplomat based in West Asia.

Little immediate change is expected in the economic situation, but one interim measure could be to channel increased funds from European and Arab donors through Abbas's office or the temporary aid mechanism.

European willingness to loosen the embargo reflects public sentiment at home and fears the embargo, spearheaded by Washington, has pushed the Palestinian Authority near collapse -- blocking salary payments to 165,000 government workers.

A World Bank report said today the crisis risked reversing all the economic gains since Palestinians gained a measure of self-rule 13 years ago.

DISTINCTION

Diplomats said European policymakers intend to draw a distinction between the new government and Hamas, giving the Islamic militant group room to deny changing its policies. But this could create political complications over diplomatic contacts with Hamas ministers if their group has not renounced violence. Hamas advocates destroying Israel.

An EU diplomat said unfreezing direct aid depended on the platform of the government and demands for Hamas to recognise Israel's right to exist, renounce violence and accept past peace deals would be ''right at the heart of the assessment''.

''The right sequence is to encourage the formation of the government, to stress the importance of what it has to say about its approach, its political platform, and then to look at what it says,'' the Brussels-based diplomat said.

Nils Eliasson, Sweden's consul-general in Jerusalem, said renewed diplomatic contacts were the most likely starting point for a policy change, but it was still early to say exactly what would happen.

''It depends on the composition of the government and the programme of the government,'' he said, adding that it would also take time for any countries to resume direct budgetary support.

Such support from European and Arab donors was vital for the Palestinian Authority before Hamas took office in March.

Although Washington would rather Abbas had sacked the Hamas government than joined with it, diplomats said it was unlikely the Bush administration would try to force the Europeans to maintain the embargo as-is.

''It may be all over ... The Americans really need them (the Europeans) on Iran,'' said one American source, referring to a US-led campaign to curb the Iranian nuclear programme.

REUTERS