- The Washington Times - Sunday, January 29, 2006

TEL AVIV — Israeli Prime Minister Ehud Olmert said yesterday that he would freeze all ties with the Palestinian Authority — a move that could stymie an already destitute economy in the West Bank and Gaza — unless Hamas renounces terrorism and recognizes the state of Israel.

At the same time, Israel has embarked on an international campaign to isolate a Hamas-led Palestinian government, reaching out to heads of state in Europe and the Middle East and U.N. Secretary-General Kofi Annan.

“Israel will be unable to have any contacts with the Palestinians,” Mr. Olmert said at the first Israeli Cabinet meeting since Hamas’ landslide in parliamentary elections last week. “I do not plan to make any compromises.”

Appearing at a press conference in Jerusalem with Mr. Olmert, German Chancellor Angela Merkel said European countries should freeze aid to the Palestinian Authority unless Hamas agrees to recognize Israel and the Israeli-Palestinian peace accords and swears off violence.

How Israel reacts to a Hamas-led Palestinian Authority in the coming weeks will be the most serious test of Mr. Olmert’s leadership since he became acting prime minister after Ariel Sharon’s stroke.

“The honeymoon for Ehud Olmert as acting prime minister ended” on Thursday, wrote Ha’aretz diplomatic correspondent Aluf Ben, referring to the day after the elections.

Still, two opinion polls indicated that a large percentage of Israelis would back talks with Hamas. A poll in the Yediot Ahronot newspaper found that 48 percent of Israelis support negotiating with the Islamic militants.

Israel must decide in the coming days whether to continue transferring the customs tax that it collects for the Palestinian Authority. A report on the Ha’aretz Web site said Israel will hold up about $44 million in customs receipts.

The decision was made amid mounting criticism of government policy toward the Palestinians by the rival Likud Party. Referring to the West Bank and Gaza as “Hamastan,” Likud Chairman Benjamin Netanyahu has challenged the Olmert administration to freeze all money transfers to the Palestinians.

“We need to stop giving them money. Not our money nor the money of all of the world,” Mr. Netanyahu said at a party convention last night.

With less than two months until Israelis hold elections, the Hamas victory has given Likud a new platform on which to attack government policy.

Likud politicians have charged that the withdrawal from the Gaza Strip last summer contributed to Hamas’ success. Party lawmakers yesterday called for the government to move its separation barrier deeper into the West Bank.

“We were afraid of the Oslo accords, and we got terrorism. We warned and then got Kassem rockets on Sderot and Ashkelon,” said Likud lawmaker Yuval Steinitz, referring to two southern Israeli cities near the Gaza Strip border.

“Now we are warning that if there is the same move, that there won’t be only Kassems on Sderot, but also on the entrance to Jerusalem, Ben Gurion Airport and Tel Aviv.”

Despite the uncertainty in the West Bank and Gaza Strip, Israel reportedly plans this week to evacuate two settler outposts in the West Bank, including one in the city of Hebron.

Although it might signal the beginning of a policy to clear out dozens of illegal embryonic settlements, the rise of Hamas will dampen Israeli enthusiasm for future pullbacks that would hand portions of the West Bank to Hamas.

“The main question now is whether unilateral withdraw … is still viable,” said Yossi Klein Halevi, a senior fellow at the Shalem Center in Jerusalem.

“That’s because we’re not talking about handing over territory to a corrupt, anarchic, terror-supporting Fatah, but to an Iranian proxy that’s far more dangerous.”

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