BRUSSELS, April 7: The United States and the European Commission on Friday stepped up pressure on the new Hamas-led Palestinian government by announcing a suspension of aid payments.

In Washington, the State Department said the US would cancel or suspend more than $240 million in projects aimed at indirectly assisting Palestinians out of concern that the money could go to help the new leadership of the Hamas.

At the same time, the statement added, the United States would redirect some of that money to humanitarian projects for the Palestinian people. Humanitarian assistance will rise by 57 per cent to $287 million over several years, the official said.

In Brussels, an official said the EU had halted aid payments to the Palestinian government because the new cabinet had not recognised Israel’s right to exist or ‘renounced violence’.

Palestinian Foreign Minister Mahmoud al Zahar, whose government took office last week, warned the EU in response that cutting aid would harm its credibility and may lead to boycotts of European interests in the Islamic world.

“For the time being, there are no payments to or through the Palestinian Authority,” Commission spokeswoman Emma Udwin said.

She told a news briefing the European Union executive was adopting ‘a policy of maximum prudence’, which did not prejudge decisions by foreign ministers of the 25-nation bloc when they meet in Luxembourg on Monday.

“We have to prepare some changes in terms of financing,” German Foreign Minister Frank-Walter Steinmeier said in Prague, adding that the Hamas government had not yet signalled it would meet the international community’s conditions to recognise Israel, renounce violence and accept past peace agreements.

“I am afraid (cutting aid) may wreck the credibility of the European Union in the Islamic world,” Mr Zahar said, adding he would write to EU foreign ministers on Saturday.—Reuters/AP