U.S. to Redirect Aid for Palestinians

By Glenn Kessler
Washington Post Staff Writer
Friday, April 7, 2006

After an exhaustive review, the United States plans to terminate assistance for building projects in Palestinian territories and redirect much of its annual aid to the Palestinians toward basic humanitarian needs, such as education, health and food, as well as increased assistance for democracy promotion, Bush administration officials said yesterday.

The primary agency for Palestinian refugees, the U.N. Relief and Works Agency, is set to receive about a 30 percent increase in aid in response to an emergency appeal for additional funding, officials said. UNRWA currently gets about $80 million from the United States. The administration had budgeted an additional $150 million in aid to Palestinians in fiscal 2006, much of it coordinated through the U.S. Agency for International Development.

The shift in aid priorities was set in motion after the unexpected victory by the radical Islamic organization Hamas in January legislative elections.

But it has taken much longer than expected to set the new parameters for aid, in part because the Justice Department wanted to be sure the new regulations did not inadvertently interfere with criminal cases against people charged with aiding charities linked to Hamas and other designated terrorist groups, officials said. Justice lawyers were concerned that defendants would use the new regulations to make the case that the United States sometimes allowed for charitable assistance of terrorist organizations.

One U.S. official, speaking on the condition of anonymity because the new policy had not been announced, said crafting the new rules had posed a difficult challenge because they did not want to increase the suffering of the Palestinian people. The Hamas-led government has already missed a payroll for 140,000 people.

"There is some tension between squeezing the government and supporting the people," the official said. "You want to try to mitigate that."

Adding to the pressure on Hamas, U.S. officials appear increasingly confident that Arab governments that have traditionally backed the Palestinian Authority, such as Saudi Arabia, Algeria, Libya and the United Arab Emirates, will begin to limit their support in the wake of the Hamas victory.

Secretary of State Condoleezza Rice approved the new policy this week, and Assistant Secretary of State C. David Welch plans to go to Capitol Hill today to brief lawmakers, officials said. The lengthy review process has increased anxiety at non-governmental agencies that help the Palestinians, since officials were uncertain which projects might run afoul of the new rules. Many feared that the regulations will be so tight that they will be unable to continue many of their projects.

"We're all waiting," said Theodore Kattouf, president of America-Mideast Educational and Training Services.

Shortly after Hamas won the elections, the United States and other key bankrollers of the Palestinian Authority said they would end assistance as soon as Hamas took control of the cabinet, unless the organization recognized the right of Israel to exist. The United States in the past did not provide much direct assistance to the Palestinian Authority -- and immediately demanded the return of nearly $50 million in direct aid -- but officials needed to determine whether indirect assistance, such as road or school construction projects, would also be affected. In the end, officials decided that any project that had a connection with a government ministry would be ended.

The United States, for now, does not contemplate providing any funding to the office of President Mahmoud Abbas, an official said. Abbas was elected last year on a platform of reaching a peaceful settlement with Israel but much of his authority has been eroded by Hamas's victory.

At the request of the Israeli government, the one exception to the new rules will be a relatively small amount of money to combat an outbreak of the avian flu in Gaza. That money will need to be coordinated with a Hamas-led ministry.

Andrew Whitley, director of the UNRWA liaison office in New York, said the agency has a staff of 13,000 in the West Bank and Gaza, supporting 70 percent of the population in Gaza and about 28 percent in the West Bank. UNRWA has asked international donors to support a $95 million emergency appeal, but he said in light of recent events the request "may be revised upwards."

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