Haniyeh: Iran Pledges $250M in Aid

The Associated Press
Monday, December 11, 2006; 12:50 PM

GAZA CITY, Gaza Strip -- Iran has pledged $250 million in aid to the cash-strapped Hamas-led Palestinian government, the latest sign of increasingly close ties between the Islamic group and Tehran, Prime Minister Ismail Haniyeh said Monday.

Haniyeh's office announced the donation at the end of a four-day visit by the prime minister to the Iranian capital. He then traveled to Sudan.

Also on Monday, the European Commission proposed a three-month extension of a special aid deal for the Palestinians that bypasses the government.

Western donors cut off hundreds of millions of dollars in aid to the Palestinian government after Hamas won parliamentary elections last January. The donors have demanded that Hamas renounce violence and recognize Israel's right to exist.

The government, heavily in debt, has been unable to pay the salaries to its 165,000 employees. Despite widespread hardship in the West Bank and Gaza Strip, Hamas has refused to accept the conditions. Instead, it has turned to Iran and other Muslim countries for help.

Iran already has pledged $120 million to the Hamas-led government this year.

Haniyeh said the new donations would come next year. "The total amount of financial aid from Iran will reach around a quarter-billion dollars," Haniyeh told Hamas' Web site.

Buoyed by the help from Iran, the Hamas-led government has managed to stay afloat, but the money is not enough to cover a deficit totaling hundreds of millions of dollars.

Hamas also has struggled to bring money into the Palestinian areas. International banks have refused to transfer money to the Palestinian government, fearing U.S. anti-terrorism laws.

Palestinian Finance Ministry officials say only half of the money pledged by Iran this year has reached the government. Much of the money has been hand-delivered to the Gaza Strip in the suitcases of Hamas officials returning from trips abroad.

A temporary World Bank-supervised alternative for the European Union that bypasses the Hamas government expires at year's end and "it is highly important" it is extended by another three months, said EU External Relations Commissioner Benita Ferrero-Waldner.

"We see that the situation in the Palestinian territories deteriorates," she said.

Her request to extend the special aid scheme for another three months was expected to be endorsed by the 25 EU leaders at a two-day summit opening Thursday, diplomats said. It took effect in July and has already been extended once.

Since the start of the year, the European Union has provided some $863 million in aid for Palestinians. Of this, $266 million has gone through the emergency aid program guaranteeing 1.3 million Palestinians access to water, sanitation and health care and providing income support payments to about 1 million Palestinians left destitute by their government's financial crisis, including may public service employees who have gone unpaid.

The EU foreign ministers were expected to issue another plea for Palestinians to form a government of national unity _ an issue that has been under debate for weeks.

Palestinian President Mahmoud Abbas has been at pains to form a broader-based government that would to bring in his more moderate Fatah party to govern alongside Hamas, which has refused international calls to renounce violence, recognize Israel and honor existing Israeli-Palestinian agreements.


Associated Press writer Robert Wielaard contributed to this report from Brussels, Belgium.

© 2006 The Associated Press