After victory, Hamas faces money crunch

Just days after besting its rivals at the ballot box, Hamas now faces a far more challenging campaign: a fight to keep the international donor community, which has kept the Palestinian Authority (PA) functioning since 1994, from cutting off funding.

The US and the European Union, often at odds over Middle East policy, now appear united in their stance: If it wants the world's assistance, Hamas must change.

Germany's new chancellor, Angela Merkel, presented that message during a visit here Monday. She asked Palestinian President Mahmoud Abbas, leader of ousted Fatah, to press Hamas to forswear violence and recognize Israel.

"As a president, he should urge Hamas to respect certain principles," Ms. Merkel said. If Hamas holds to its hallmarks - calling for Israel's destruction and using suicide bombers - the EU would be unable to continue funding the PA, she said.

But in a statement Monday, the EU backed away from saying it would completely cut funding to a government led by the militant group. EU foreign ministers said they expected the new Palestinian Legislative Council to back the creation of a government "committed to a peaceful and negotiated solution of the conflict with Israel.... On this basis the EU stands ready to continue to support Palestinian economic development and democratic state-building."

The US is taking a much harder line on Hamas, which it considers a terrorist organization. "The Hamas party has made it clear that they do not support the right of Israel" to exist, President Bush said Monday. "And I have made it clear that so long as that's their policy that we will not support a Palestinian government made up of Hamas."

The pressure to keep foreign funding coming to the PA may push Hamas leaders to make some crucial decisions about their stances if Hamas wants to move into the business of governance and away from being branded terrorists.

At least half of the PA's $3 billion budget is dependent on funds from donors. Another major source of income is import duties, which are collected by Israel at the country's borders and later transferred to the PA's coffers. Acting Prime Minister Ehud Olmert warned that Israel might stop transferring the funds, a step Israel has taken before.

Since last week's election, in which Hamas took a remarkable 76 out of 132 seats, the militia-cum-political party has been sending mixed messages.

Analysts here have long delineated differences that are developing within the organization, between extremists and the more moderate forces in Hamas. What's more, the message from the top Hamas figures in the West Bank and Gaza differs from the tone being struck by the "outside," the Hamas spokesmen living abroad, primarily in Damascus, Syria.

Ismail Haniyeh, the No. 1 on Hamas's electoral list in Gaza, called on foreign donors Monday to continue to their aid.

"We confirm to you this income will be used to pay the salaries of [government] employees and fund daily running costs and infrastructure. You can confirm this through a mechanism that can be agreed upon," Mr. Haniyeh told reporters. "We call on you to understand the priorities of our Palestinian people at this stage and continue the spiritual and financial support in order to push the region toward stability rather than pressure and tension."

Haniyeh asked the EU to understand the "Palestinian reality" and not ask Hamas to disarm. Doing so would "increase the suffering of our people who are looking for freedom, right of [refugee] return, and independence," he said.

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