RIYADH, Feb 23: Saudi Arabia has rejected a US demand to stop financial assistance to a Hamas-led Palestinian government. During a news conference on Wednesday night, Saudi Foreign Minister Prince Saud Al Faisal said in the presence of the United States Secretary of State Condoleezza Rice that aid to Palestinians should be based on humanitarian needs.

However, a US official was quoted here as saying that the Saudi government had denied a request from Hamas to let its delegation visit the kingdom.

The prince said: “The kingdom affirmed its complete commitment to avoid jumping to pre-judgments.”

He said: “(Saudi Arabia) hopes that international aid for the Palestinian people should be linked only with the pressing humanitarian need of this people.”

Stopping aid for a sewerage system infrastructure, which is the sort of project which the US wants to be starved of funding, was effectively denying Palestinians humanitarian help, he said.

Saudi Arabia’s rejection comes a day after Egypt declined to toe the US line on the issue. Both Prince Saud and Egyptian Foreign Minister Ahmed Aboul Gheit said the world should not prejudge Hamas, signalling that the Arab world, like some European countries and Russia, is hedging its bets about whether and when to sever financial ties that keep the Palestinian government afloat.

Saudi leadership reportedly told Secretary Rice that it planned to continue sending approximately $15 million a month, via the Arab League, to the Palestinian government.

In order to increase its pressure on Hamas, Washington had earlier asked the Palestinian Authority to return $50 million in aid for infrastructure projects, fearing that it would fall into the hands of Hamas.

Ms Rice, who also met the new head of Saudi secret services Prince Meqrin bin Abdulaziz, also seemed to have problems in convincing the Saudi leaders to isolate Iran, accused by the United States of seeking nuclear weapons.

“In this regard, we think ... that there is no proof yet that they are producing atomic weapons. They deny this. They’ve denied it many times to us. They say they need the technology for their own purposes,” Prince Saud said.