- The Washington Times - Monday, June 25, 2007

JERUSALEM — Israel agreed yesterday to begin releasing hundreds of millions of dollars in frozen tax funds to Palestinian Authority President Mahmoud Abbas, a gesture to bolster the moderate Palestinian leader in his standoff against the Islamic militant group Hamas.

The decision was made a day before Prime Minister Ehud Olmert heads to Egypt for a high-profile summit with Mr. Abbas, President Hosni Mubarak of Egypt and Jordanian King Abdullah II.

The gathering is meant to give Mr. Abbas a high-profile display of support against Hamas, which seized control of the Gaza Strip in a bloody rout of Mr. Abbas’ Fatah movement earlier this month.

Mr. Olmert cautioned against high expectations for the summit.

“We have an interest in having this meeting, but I don’t want anyone to think we’re on the brink of a dramatic breakthrough,” Mr. Olmert told his Cabinet, as related by a meeting participant.

Mr. Abbas, however, said he received U.S. and Israeli assurances that Israel was ready to make progress at the summit.

The Palestinian president said he would ask Israel to free Palestinian prisoners, in addition to easing restrictions at crossing points and releasing the tax money, the official Jordanian news agency Petra reported.

Ismail Haniyeh, the deposed Palestinian prime minister, dismissed the summit as a “mirage,” saying resistance was the only hope for Palestinians.

“The Americans won’t give anything. Israel won’t give us anything. Our land, our nation will not come back to us except with steadfastness and resistance,” a code word for attacks against Israel, he said in Gaza.

The Palestinian infighting has left the Palestinians with two governments: Mr. Abbas’ new Cabinet in the West Bank and the Hamas rulers in Gaza. Israel and moderate Arab leaders have joined to support Mr. Abbas and isolate Hamas, a radical group pledged to Israel’s destruction.

Olmert aide David Baker said it was premature to begin talks on a final peace deal despite calls from the Palestinians and other Arab countries to do so.

Israel is prepared to discuss “a political horizon,” he said. “These talks do not include final status issues, but rather how the prime minister and the president of the Palestinian Authority would envision a future Palestinian state.”

Israel has withheld about $550 million of Palestinian tax money since Hamas swept Palestinian parliamentary elections in January 2006, saying it feared that Hamas would use the money to finance terrorist attacks.

Mr. Abbas kicked Hamas out of the Palestinian government after the group took Gaza, clearing the way for a transfer of the money.

Mr. Olmert’s spokeswoman, Miri Eisin, said that the Cabinet vote yesterday was a “decision in principle” to release the funds, and that the “exact amount” would be discussed at today’s summit and then by the Israeli government.

A Cabinet meeting participant said he expected a “mechanism” for transferring the money to be in place within days. However, he said the money would not begin flowing until Mr. Abbas’ new government formally accepts international calls to renounce violence and recognize Israel.

The official, who asked not to be identified under Israeli civil servant rules, said the money would be released gradually to ensure it doesn’t reach Hamas.

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