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Hamas-led Palestinian government won't get U.S. funds, Rice says

LONDON—The United States will provide no funds to a Palestinian government formed by the Islamist group Hamas, and expects the same from other countries and international institutions, Secretary of State Condoleezza Rice said Sunday.

Rice's declaration of what she called a "bedrock principle" raises the possibility that a Hamas-led Palestinian Authority won't be able to pay its officials and police officers. The United States contributed $70 million to the Palestinians last year; the European Union contributed $612 million.

Rice made her comments Sunday as she flew here from Washington for talks Monday with officials from the European Union, Russia and the United Nations on Middle East issues in the wake of Hamas' startling landslide victory in Palestinian parliamentary elections last week.

Rice said that the Bush administration would continue providing humanitarian aid "on a case-by-case" basis to projects that help the desperately poor majority of the 3 million Palestinians living in the West Bank and Gaza.

But a Palestinian government formed by Hamas will not receive U.S. funds, she said.

"Hamas doesn't recognize Israel, advocates violence, and refuses to be a responsible party to the peace process," she said, noting that the United States, the European Union and the United Nations list the organization as a terrorist group.

"The bedrock principle here is that we cannot have funding for an organization that holds those views just because it is in government," she said.

The top U.S. diplomat indicated that she would press for similar commitments in her talks with officials from nations that, along with the United States, form the so-called Quartet directing Israeli-Palestinian peace talks: European Union foreign policy chief Javier Solana, Russian Foreign Minister Sergei Lavrov and U.N. Secretary-General Kofi Annan.

"We are talking about assistance from the international financial institutions, we are talking about United Nations assistance, we are talking about European assistance, we're talking about Asian assistance, we're talking about considerable assistance from the region and we are talking about American assistance," she said.

"The implications of supporting a peace process on the one hand, in which we are all part of the Quartet, and on the other hand supporting the activities of a partner in that set of negotiations that doesn't even recognize the existence of the other partner, it just doesn't work," Rice said.

The Bush administration sees international funding as a key source of leverage to strong-arm Hamas into abandoning its hard-line positions, something its leaders have refused to do since last Wednesday's elections.

But it was unclear how successful Rice would be in convincing the other Quartet members—as well as Arab and other Muslim governments—to embrace the Bush position.

The Quartet members all demanded that Hamas renounce violence, recognize Israel and disband its armed wing after the elections in which the group won 74 out of 132 seats, ending decades of dominance of Palestinian politics by Fatah, the faction founded by the late Yasser Arafat.

Hamas has so far rejected those demands.

Others have questioned the wisdom of withholding funds, suggesting a cutoff would allow Iran to expand its influence by making up for the losses.

Iran is already a key backer of Hamas and has adopted a more confrontational policy toward the West since the election last August of hard-line President Mahmoud Ahmadinejad, who has called for the destruction of Israel.

Rice did not address the possibility of Iranian aid, but said that she hoped "people" would "not try to fill that gap" created by the U.S. funds cutoff.

It is not clear when a Hamas-led government will be forged. Palestinian President Mahmoud Abbas, the leader of the Fatah faction, has said he will name a prime minister from among Hamas' winning slate of candidates, but it is unclear who that person will be.

Tensions between Hamas and Fatah, which dominates the Palestinian security services, have surged since the election.

The Palestinian Authority, which oversees the West Bank and Gaza Strip, is already essentially bankrupt, with a deficit of more than $60 million in its annual budget of $1.3 billion.

Israel, which has refused to have contact with a Hamas government, may withhold up to $50 million in customs revenues and tax receipts it collects on the PA's behalf.

Last year, the United States provided $225 million in humanitarian assistance through the U.S. Agency for International Development and $88 million to U.N. assistance programs for the Palestinians.

Rice also said she had ordered a review into why the State Department had failed to predict the Hamas victory.

"I don't know anyone who wasn't caught off guard by Hamas' strong showing," she said. "Some say that Hamas itself was caught off guard."

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(c) 2006, Knight Ridder/Tribune Information Services.

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