US ending years of Gaza civic work

Hamas's Ahmed Yousef wears a Statue of Liberty pin on his suit lapel. He began putting it on after 9/11, when he lived in the US, as a reminder of American values - and as a critique of the subsequent anti-Arab backlash he experienced.

But the symbol of freedom worn by Mr. Yousef, Palestinian Prime Minister Ismail Haniyeh's political adviser, is about the extent of the US presence found in the Gaza Strip these days. No US official has been on a visit here in more than six months.

Following the January electoral victory of Hamas, designated by the US as a terrorist organization, American officials in the region have been in the midst of a comprehensive reduction of all contacts with the Palestinian Authority (PA), from political ties to development aid.

As part of the rethink, relations with every Palestinian government ministry is now forbidden. US officials who have long been involved in assistance on security affairs are faced with trying to distinguish which of the Palestinian forces are under the interior minister or prime minister - and therefore off limits - and which are under the president, Mahmoud Abbas. Only offices under the helm of Mr. Abbas, the leading Fatah official, are open to US officials for dialogue.

"This isn't business as usual," says a senior US official. "We're not doing things as we've been doing them before."

And yet, in recent years, the US has invested heavily in cultivating a relationship with the Palestinians, focusing not just on reconciliation with Israel but on fostering democracy and rule of law.

$1.7 billion in assistance

Since 1993, the year former Palestinian leader Yasser Arafat signed a peace deal with Israel, the US has given $1.7 billion in assistance to the Palestinians. Does all of that work go to waste - or fall into deep-freeze - for as long as Hamas is in power?

Officials here, both Palestinians and Americans, say they hope not. The challenge, diplomats and development specialists are finding, is figuring out how to maintain some form of relationship when the political channels are at odds.

For Michael Murphy, who heads the local office of the National Democratic Institute (NDI), navigating the post-election political scene is a case in point. The Washington-based organization is one of the most active worldwide in democracy-building programs, focusing on training political parties and lawmakers.

But NDI, funded entirely by the United States Agency for International Development (USAID) has had its budget put on hold. In an interview in the NDI head office in Beit Hanina, a Palestinian neighborhood in East Jerusalem, Mr. Murphy says that he is finding it increasingly difficult to do his job while his local contacts look askance at the organization's roots in the US.

"It hasn't been lost on anyone that we've been promoting democracy, then we turn around and say, we don't like your choice," he says. "It confirms some fears that the US is not a fair broker.

"They won't see it's about rule of law and democracy if the international donors won't support the outcome of the elections," he adds. "I think it will damage the ability of the US to be a fair broker in the Israel-Palestinian conflict."

Mr. Murphy, who is Canadian, says that the fact that he isn't American does not necessarily make his job easier. Palestinian officials are quick to point out to him that Canada was the first country to declare, after Hamas swept to power, that it was cutting off aid to the PA.

Meanwhile, he says, colleagues in the development community are eyeing the sitaution warily. With the PA close to broke, government salaries have gone unpaid since March. Military groups loyal to Fatah and Hamas have been turning their weapons on each other with increasing frequency. "A PA that stops functioning or collapses," Murphy says, "is much worse than a Hamas-run PA, with all of its difficulties."

For the past eight years the Arab Thought Forum has received the majority of its funding from USAID - from $300,000 to $400,000 a year. But as of February, the Forum, an East Jerusalem think tank that focuses on democracy-building programs, was cut off entirely, and has had no contact since - nor any indication as to whether the funds might be restored.

Abdel Rahman Abu Arafeh, the Forum's executive director, says they were fortunate enough to find other sources of funding to make up for the loss, primarily from European countries and the United Nations. Rather than a financial crisis, he says, it is an "ethical or moral" one.

"It's not just a frustration - the money can be replaced. With the help of American money, we were proud to help develop the concept of democracy in Palestine so that elections could take place and could be fair and free," Mr. Arafeh says.

"I understand the political complications, but democracy is democracy. Maybe it happens I am one of those who is against Hamas, but it's our government now and we have to accept it. With the American and European attitude, we feel as if someone is deciding on our behalf who our government should be, so why have democracy? The first ones not to respect the outcome of our elections are the Americans and the Europeans.

"There is a lot of frustration among the people now. Five years ago, the US was seen as a symbol of democracy and human rights. Everything has been damaged in the last five years, not just with how they are dealing with us, but also what the Americans are doing in Iraq and Guantánamo Bay," he says.

To be sure, the US presence in Palestinian affairs has not evaporated.

US officials continue to make visits to the West Bank, and have been working in recent weeks to boost its role as a provider of humanitarian aid. Earlier this month, the US government pledged it would give $10 million for health needs in the West Bank and Gaza.

Every US aid project under review

But outside of such apolitical assistance, most every other aid project to the Palestinians is under review, giving officials direction to examine, grant by grant, where the money is going and whether it might end up with Hamas.

It also means that US diplomats need to distinguish, perhaps more finely than ever before, to whom they should talk.

"We made a conscious decision: If someone is under the authority of the prime minister, we weren't going to deal with them, regardless of what their affiliation is," the US official says.

"Obviously this limits our relationship with the Palestinians - we used to deal across the board, with a whole range of ministries on a whole range of things. We're not able to do that anymore, which is unfortunate," he says.

Yousef, the prime minister's adviser, says he is hopeful that Western donors, including the US, will consider speaking to Hamas. "We have received some signals that there would be some major shifts, including from the Americans," he says in an interview.

"How are you going to bring democracy to the Middle East if you surround it and make people starve? The way that they're treating our government now is with a lack of respect."

There does appear to be real interest in keeping the doors open to Israeli-Palestinian dialogue - even if through a back door.

During their meeting last week, President Bush told Israeli Prime Minister Ehud Olmert that he should give peace talks with Abbas a chance - at least until the end of the year. If not, Mr. Bush indicated that the US would support further Israeli moves to go it alone with unilateral withdrawals from occupied territory.

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