U.S. lifts Palestinian embargo

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The Bush administration yesterday lifted economic sanctions and a diplomatic embargo against the Palestinian Authority after its expulsion of the Islamist group Hamas, which seized the Gaza Strip last week.

Seeking to strengthen President Mahmoud Abbas by resuming direct U.S. aid, the administration moved swiftly after Mr. Abbas ousted Hamas from his national security council, installed an emergency Cabinet and outlawed the terrorist militia, which calls for the destruction of Israel and the death of all Jews worldwide.

Secretary of State Condoleezza Rice said yesterday that she told new Palestinian Prime Minister Salam Fayyad of the decision to end the 15-month-old embargo in a telephone call.

"I told him the United States would resume full assistance to the Palestinian government and normal government-to-government contacts," she told reporters at the State Department.

"We intend to lift our financial restrictions on the Palestinian government, which has accepted previous agreements with Israel and rejects the path of violence. This will enable the American people and American financial institutions to resume normal economic and commercial ties with the Palestinian government," Miss Rice said.

In another major boost to Mr. Abbas, European Union foreign policy chief Javier Solana announced yesterday in Luxembourg that the 27-nation bloc would resume direct financial aid -- hundreds of millions of dollars -- to the Palestinian Authority now that Hamas is no longer part of the government.

Mr. Abbas' Information Minister Riyad al-Malki told reporters after the new government met in the West Bank city of Ramallah that "the government will pursue its jurisdiction over all parts of the homeland, regardless of what happened in Gaza."

In the past week, Hamas has seized control of Gaza by force, winning a series of battles with Mr. Abbas' Fatah movement and executing its members.

The U.S. move to remove sanctions and restore funding still requires the approval of Congress, but Miss Rice said the administration will request lawmakers rework an earlier $86 million aid request. Mr. Abbas needs that money to increase his security forces.

Earlier yesterday, the White House said, President Bush spoke with Mr. Abbas to express full U.S. support for his decision to move against Hamas. In the call, Mr. Bush noted that he plans to meet today with Israeli Prime Minister Ehud Olmert, and that he would share their thoughts on how to continue, White House press secretary Tony Snow said.

"What's important is, you have to have a partner who is committed to peace, and we believe that President Abbas is," Mr. Snow said. "Therefore, we are committed to working with this new emergency government."

In New York, Mr. Olmert said Israel would release frozen tax revenues to Mr. Abbas and "take perhaps more risks" in cooperating with his government. Miss Rice said the U.S. would contribute another $40 million to the United Nations to help Palestinians, particularly in the Gaza Strip, which is now controlled by Hamas.

Mr. Bush, throughout his two terms, had refused to deal directly with Palestinian leader Yasser Arafat and instead sought to isolate the Palestinian Authority. But Hamas' victory in democratic elections in early 2006 plus last week's fighting has made the Fatah movement, which Mr. Arafat founded and Mr. Abbas leads, look more palatable to the U.S., Europe and Israel.

"Through its actions, Hamas sought to divide the Palestinian nation; we reject that," Miss Rice said. "It is the position of the United States that there is one Palestinian people and there should be one Palestinian state.

"We are not going to countenance that somehow the Palestinians are divisible," she said. "We are not going to abandon the Palestinians living in Gaza."

The violent takeover of Gaza by Hamas has split the Palestinian government in two: a Fatah-allied government in the West Bank and the Hamas leadership in Gaza. The Hamas leadership is headed by deposed Prime Minister Ismail Haniyeh in Gaza and the new Cabinet is now led by Mr. Fayyad, a U.S.-educated economist, in the West Bank.

An aide to Mr. Abbas said Iran had encouraged Hamas to use violence to take control of the Gaza Strip.

"Iran supports non-democratic groups in Palestine, Lebanon and in Iraq, and we hold Iran responsible for encouraging Hamas to carry out its coup in Gaza," Yasser Abed Rabbo said.