Bush backs Abbas cabinet; US poised to resume aid

WASHINGTON, June 18 (Reuters) Palestinian President Mahmoud Abbas told President George W Bush today he is prepared to resume peace talks with Israel, and the US leader pledged his support, the White House said.

Abbas spoke to Bush by phone amid growing expectations of renewed US aid following the moderate Palestinian president's creation of an emergency cabinet in the West Bank after Hamas militants seized control of the Gaza Strip last week.

The State Department indicated an announcement on long-frozen aid would likely be made later today. The White House said Bush was expected to discuss the issue with Israeli Prime Minister Ehud Olmert in talks in Washington tomorrow.

Abbas told Bush he ''wanted to resume the political process and open political channels,'' White House spokesman Tony Snow said, confirming an account from an Abbas aide. But he said no timetable for negotiations with Israel had been discussed.

Washington wants to accelerate contacts between Olmert and Abbas while isolating Hamas economically, diplomatically and militarily in Gaza. The United States, Israel and the European Union regard Hamas as a terrorist organization.

Once the ban is lifted, direct U.S. aid would flow to the Palestinian government for the first time since an embargo imposed in 2006 after Hamas won a parliamentary election and refused demands to renounce violence and recognize Israel.

Bush affirmed his support for Abbas's emergency cabinet formed in the West Bank after the Hamas Islamist group's armed wing routed security forces dominated by Abbas's Fatah movement.

The effective split between the West Bank and Gaza is widely seen as a blow to Palestinian aspirations for an independent state encompassing both territories.

AID ANNOUNCEMENT EXPECTED State Department spokesman Sean McCormack told reporters to ''stay tuned'' for word on aid to the new government Abbas formed after dismantling a unity government shared by Hamas and Fatah. But he offered no details.

''We are going to be quite attentive to the humanitarian situation in Gaza,'' McCormack also said. ''We are going to take a look at what we might do within the bounds of our laws and regulations to help meet some of those humanitarian needs.'' Asked whether Bush and Abbas talked about restart US aid, Snow told reporters: ''President Abbas mentioned it, but again it was in very general terms.'' The European Union also wants to resume direct aid to the Palestinians to bolster Abbas's new cabinet but is still looking at when it can release funds, EU officials said.

Snow declined to say whether the United States sees a split between a Fatah-dominated West Bank and a Hamas-controlled Gaza as potentially positive for the West Asia peace prospects.

But he did say that ''what is important is you have a partner committed to peace and we believe President Abbas is.'' Asked whether Bush told Abbas it was time to resume talks with Israel, Snow said: ''President Abbas made it clear that it is, and the President said that we will support it.'' Reuters SG DB2342