January 28, 2006	Saturday	Zilhaj 27, 1426

WASHINGTON, Jan 27: The United States will review all aspects of its aid programs to the Palestinians if Hamas enters government, the State Department said on Friday. “To be very clear, we do not provide money to terrorist organizations,” said State Department spokesman Sean McCormack. “We will take a look at the full spectrum of our aid programs.”

Hamas is classified by the United States as a terrorist group.

Mr McCormack said everyone understood the Palestinians were poor and needed help, but he said US financial assistance had to follow US laws and policies.

The aid issue would be discussed, he said, during talks in London on Monday with other members of the Quartet of Middle East mediating powers — the United Nations, the European Union and Russia.

Since 1993, the Palestinians have received more than $1.5 billion in US economic assistance through the Agency for International Development, the US government’s humanitarian agency.

Last year, Washington gave $225 million in direct aid to the Palestinians via USAID and $88 million to a U.N. fund for Palestinian refugees.

In addition, Washington gave $70 million in direct assistance to the Palestinian Authority after President George Bush waived US restrictions on providing direct assistance to the authority.

For this year, the United States has budgeted $150 million in assistance to the Palestinians via USAID and a further $84 million to the U.N. fund.

Israeli warning: Israel threw into doubt on Friday its willingness to transfer customs revenue to the Palestinians after militant group Hamas’s victory in this week’s election.

“We will face practical problems of how you deal with people that call for the destruction of Israel,” Joseph Bachar, director general at the Israeli Finance Ministry, told the World Economic Forum in Switzerland.

Mr Bachar was referring to customs and value-added tax revenue that Israel collects on behalf of the Palestinians and which he said was the main source of funds for the Palestinian budget.

Palestinian Economy Minister Mazen Sinokrot, sitting on the same forum discussion panel as Bachar, said the Palestinian Authority faced a financial crunch as early as next week if Israel withholds the $40-50 million it hands over every month.

Mr Sinokrot said the cash transfers in question amounted to “monthly revenues exceeding $40-50 million” and Israel was obliged to pay.

“This is not donor money. They have to bring the money, the money for the Palestinian people, they cannot really think otherwise,” he told Reuters.

“Where these salaries should come from for 135,000 employees?” he said. “If those salaries are not coming, this is a message for violence.”

Mr Bachar later said: “There will be a decision next week” over transfers of the customs and tax revenue.

Former World Bank chief James Wolfensohn, now a special envoy for Western powers in the Middle East, said the international donors who prop up the Palestinian economy would not keep pumping money in if there was political uncertainty.—Reuters