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Bush promises $50 million in aid to Palestinian Authority

WASHINGTON—President Bush pledged Thursday to give $50 million in aid directly to the Palestinian Authority and renewed his demand that Israel stop expanding settlements in contested areas to ensure progress toward peace.

After an Oval Office meeting with Palestinian Authority President Mahmoud Abbas, Bush also announced that he's sending Secretary of State Condoleezza Rice to Jerusalem and Ramallah, West Bank, before Israel's scheduled withdrawal from the Gaza Strip this summer to help make it go smoothly.

Bush fears that any setback to Israel's settlement-withdrawal schedule could derail the U.S.-sponsored "road map" plan for peace, which is designed to end nearly five years of violence and create an independent Palestinian state.

Palestinians are wary of Israeli Prime Minister Ariel Sharon's disengagement plan in Gaza. They fear it's only a ruse for Israel to avoid broader obligations under the road-map plan for a more comprehensive withdrawal from the West Bank, where Israeli settlements have been expanding.

Bush, seeking to assure Abbas, on Thursday repeated a demand he made to Sharon during their summit at Bush's Texas ranch last month that Sharon end settlement expansion.

"Israel should not undertake any activity that contravenes road-map obligations or prejudices final-status negotiations with regard to Gaza, the West Bank and Jerusalem," Bush said during a Rose Garden news conference with Abbas. "Therefore, Israel must remove unauthorized outposts and stop settlement expansion."

Bush's meeting with Abbas was his first with a Palestinian leader and the first time a Palestinian leader has been in the White House since 2000, when peace talks collapsed. Bush froze out the late Palestinian leader Yasser Arafat from negotiations because Bush considered him unreliable.

Bush signaled that Abbas is a man he can work with.

"You have made a new start on a difficult journey, requiring courage and leadership each day," Bush said. "And we will take that journey together."

Bush gently praised Abbas for his accomplishments over four months in office and gently prodded him to do more to rein in activities by militant groups such as Hamas.

Sharon maintains Abbas hasn't done enough to crack down on Palestinian weapons-smuggling and arms production.

"The United States and the international community applaud your rejection of terrorism," Bush told Abbas. "All who engage in terror are the enemies of a Palestinian state and must be held to account."

The meeting served two purposes: For Bush, it was to show Arab leaders his commitment to spreading democracy through the region and solving the Israeli-Palestinian conflict.

For Abbas, it was to instill confidence among Palestinians in the road map's viability, bolster his image as a leader and get much-needed assistance from Washington to help his cash-strapped government create jobs and provide services. Hamas and other militant groups offer free services such as schools and health care, which the Abbas government struggles to match.

Historically, U.S. funding to the Palestinian Authority has been funneled through nongovernmental organizations and philanthropic groups to keep it from falling into the hands of corrupt Palestinian officials.

However, the latest $50 million would not be the first direct U.S. aid to the Palestinian Authority; some $75 million went directly in 2003 for electricity and more aid earlier this year to help stage successful elections.

Bush said the $50 million in new aid would be used for housing and infrastructure projects in the Gaza Strip.

"These funds will be used to improve the quality of life of the Palestinians living in Gaza, where poverty and unemployment are very high," Bush said.

The $50 million, which comes from 2005 funding that Congress approved, will be placed in a special account under the control of the Palestinian finance minister. The money will be used for projects agreed on by the United States and the Palestinian Authority.

"We'll consult closely with the Palestinian Authority about how these dollars are used," White House Press Secretary Scott McClellan said. "There is an elaborate process in place to track the money throughout the process."

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(c) 2005, Knight Ridder/Tribune Information Services.

PHOTOS (from KRT Photo Service, 202-383-6099): BUSH-ABBAS

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