West Opening Dialogue With Palestinians

Palestinian President Mahmoud Abbas, center, attends a funeral ceremony for Ez Aldeen Al Sharef, a high official in his office who died in Jordan on Tuesday, in the West Bank city of Ramallah Wednesday, March 21, 2007. The formation of a new Palestinian government has pried open diplomatic floodgates, with a clutch of high-ranking European officials making their way to Ramallah to meet with Cabinet ministers they'd shunned for the past year. Walking left is Tayeb Abdel Rahim, a top aide to Abbas. (AP Photo/Nasser Shiyoukhi) (Nasser Shiyoukhi - AP)

Secretary of State Condoleezza Rice and German Chancellor Angela Merkel are expected in Ramallah over the weekend, but they will likely meet only with Abbas, not members of the new Cabinet. Germany now holds the rotating EU presidency.

In Washington, the "Quartet" of Mideast mediators _ the U.S., U.N., EU and Russia _ said the new Palestinian government would be judged by its actions, hinting at easing its conditions for restoring aid. Rice, however, announced that U.S. security aid would be cut in half to prevent American money from reaching Hamas.

Rice said Wednesday she would send Congress a revised security assistance package for the Palestinians to make sure none of the money ends up with forces loyal to Hamas. She did not provide specifics, but a senior U.S. official said the cut would amount to about $36 million, leaving $50 million of the original package.

Israel reiterated its call for a boycott of the entire government. "Israel's perspective is that this is one government, with one prime minister and one platform," said Foreign Ministry spokesman Mark Regev. "We don't believe that politicians with moderate credentials who are in the government should serve as fig leafs to make a Hamas-led government legitimate."

The renewal of contacts won't necessarily translate into a lifting of the sanctions imposed a year ago, when Hamas swept to power in parliamentary elections.

Since then, the international community has stopped most development projects and frozen aid to the Palestinian Authority, while Israel has withheld more than $500 million in tax transfers.

As a result, the Hamas government had trouble paying the salaries of 175,000 civil servants, whose incomes provide for one quarter of the Palestinians. The government also struggled to provide basic services, such as health care, welfare payments and education.

Despite the boycott, international donors ended up sending more than $1.2 billion in aid to the Palestinians in 2006, up from about $1 billion the year before, according to estimates by aid officials Wednesday. Mario Mariani, a senior European aid official, said total European assistance came to about $930 million in 2006, an increase of more than 30 percent from the year before.

Much of it was emergency aid to ease a humanitarian crisis largely triggered by the sanctions. The aid was delivered less effectively because _ in an attempt to bypass the Hamas government _ it went to multiple recipients, including Abbas' office and Palestinians' personal bank accounts, rather than to the Treasury.

"More money was spent in a less coordinated manner," said Pierre Bessuges, deputy director of the U.N. Office for the Coordination of Humanitarian Affairs in the Palestinian territories.

The disjointed way of delivering money helped to dismantle Fayyad's single Treasury bank account, which had been praised by donor countries as the biggest achievement in Palestinian fiscal reform.

"The donor community, particularly the Europeans, first invested billions in the institutional development of the Palestinian Authority, and over the past year, invested in a policy that basically dismantled the past achievements," said Mouin Rabbani, an analyst with the International Crisis Group, an independent think tank.

However, Israeli analyst Gerald Steinberg of Bar-Ilan University said the sanctions forced Hamas to share power and delivered a clear message to the Palestinians. "Most Palestinians recognize that they are paying a huge price for having the radical leadership of Hamas and in that, I would say, yes, (the sanctions) are effective," he said.