Newly appointed Palestinian Prime Minister Salaam Fayyad said this week that he would not differentiate between Hamas-aligned government employees and those linked to the now ruling Fatah party when distributing funds, but is under pressure to reverse his position.
The Israeli stance comes after Prime Minister Ehud Olmert urged US President George W.Bush to intensify pressure on Hamas as moves accelerate towards restarting a comprehensive peace process with the PA.
US Secretary of State Condoleezza Rice said Washington would not ignore the humanitarian needs of up to 1.4million Gazans and pledged $US40million ($47million) in direct aid as part of a US package, announced yesterday, to re-engage the PA.
The US said it would renew full diplomatic ties with the PA under President Mahmoud Abbas and Mr Fayyad. Dr Rice also flagged a willingness to re-engage the PA on moves towards a lasting peace, centred on a two-state solution between Israel and the Palestinians.
Officials in Jerusalem said up to $US700million in withheld Customs and VAT taxes would be released to the PA as soon as technical issues were sorted out. The taxes would have been paid in $US50million instalments for the past 14 months, but were frozen after Hamas won Palestinian elections in January 2005.
The EU said it would immediately renew Palestinian aid.
Mr Abbas's aides have blamed Iran for the violent takeover of Gaza, claiming Hamas's military wing takes instructions from Tehran. Iran was one of the few countries to financially support Hamas when it ruled the PA alone, and during the three months of coalition rule with Fatah that ended with last week's revolution.
Tehran criticised the decision by Mr Abbas to sack Hamas from the Government, claiming it overturned a democratic process.
"We reject accusations by Iranian Foreign Minister Manouchehr Mottaki that the formation of the emergency Government is a step that is hostile to democracy. Iran has no right to give us lessons in democracy," top Abbas aide Abed Rabbo said.
Hamas has admitted close links to Tehran, but denied its actions were ordered by Iran.
Source : www.theaustralian.news.com.au
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