After victory, Hamas faces money crunch

In Damascus, where the "outside" leadership is based, the Hamas message has struck a more belligerent tone. There, top Hamas spokesman Khaled Meshal said over the weekend that Hamas would look to form its own army now that it is in power.

In an interview aired on Al Arabiya television, another Hamas official, Mohammed Nazzal, said that cutting off funds would amount to punishment of the Palestinian people; another Hamas official called it blackmail.

"If the European Union countries and the American administration see this as a means that could lead to a change in Hamas's strategic position, then they are dreaming and are mistaken. Hamas will never accept that," Mr. Nazzal said.

Hamas itself, many of its new electees admit, was caught off guard by its win. It was preparing to be an opposition party in the new Palestinian parliament, not its main power broker.

As such, last week's vote also leaves the Quartet countries (the four key Middle East interlocutors: the US, United Nations, the EU, and Russia) at something of a loss about how to deal with Hamas. The Quartet partners held talks in London Monday on how to balance the aid commitments against the policy of not aiding any group deemed a terrorist organization.

Mr. Abbas tried after meeting with Merkel to distinguish between Hamas as a party and the PA as a whole. Under his leadership, he said, the Palestinians would still pursue negotiations with Israel.

One proposal being floated is the possibility of Hamas appointing a moderate prime minister who is sympathetic to Hamas, but not a member of Hamas itself.

Amid the controversy, many Palestinians have grown critical of US and European demands that Hamas change its position vis-à-vis Israel. They point out that the region has been under pressure to democratize, in particular by the Bush administration.

"Aid to the Palestinian Authority is aid to the Palestinian people: either they are still in need of this aid or not, they should not be subject to hardship because of whom they elect," says Mustafa Abu-Sway, a professor of Islamic Studies at Al Quds University in East Jerusalem.

"When we look at the region, we see that if there are open and free elections in all these countries, I'm sure that Islamists will rise to power in most if not all of them," he adds. "This is where people are casting their votes, and so you can't ignore the will of those people and not agree to deal with their leaders."

• Wires contributed to this article.

• The European Union is the largest donor to Palestinian projects. Last year it gave $612 million in aid, but halted direct payments to the Palestinian Authority (PA) due to concerns over the high level of government salaries.

• The United States gave the PA $400 million last year and has budgeted $234 million in assistance this year. Since 1993, the US has given the Palestinians more than $1.5 billion.

• Israel has suggested it would suspend customs revenue transfers to the PA, which total $40 million to $50 million per month and are crucial toward paying the salaries of 135,000 Palestinian employees.

• Hamas has rejected threats of a funding cutoff as blackmail and has said it could seek money from alternative sources, within the Arab world and beyond.

Source: Reuters

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