U.S., EU to cut off funds to Hamas

The U.S. will redirect $100 million in aid to humanitarian assistance.
WASHINGTON (AP) -- The Bush administration said Friday it would cut, suspend or shift up to $411 million in Palestinian aid as part of an international effort to deny funds to the radical Hamas movement that has won control of the Palestinian government.
The European Union announced that it, too, was cutting off funds, denying the Hamas-led government in the impoverished Palestinian territories the bulk of the foreign underwriting that keeps services running.
Both the United States and the European Union regard Hamas, which has pledged violence against Israel, as a terrorist organization.
"The new Palestinian government must take responsibility for the consequences of its policies," Secretary of State Condoleezza Rice said.
The Islamist group's political wing won Palestinian parliamentary elections in January, leading to a line-by-line review of about $600 million in U.S. assistance programs, from food to roads to training for government workers.
The result was the decision to end, at least for now, projects that could even indirectly benefit Hamas, such as road and waterworks construction.
The United States will redirect about $100 million from canceled projects to humanitarian assistance such as food and medicine, a 57 percent increase, officials said.
No aid to president
However, the United States plans no aid now to Palestinian President Mahmoud Abbas, a holdover from the previous moderate Fatah leadership whose future power is uncertain. Washington had hoped Abbas could lead the Palestinians toward a peace deal with Israel and a separate independent Palestinian state.
"I don't rule it out, I don't rule it in," Assistant Secretary of State David Welch said of future aid to Abbas.
Welch said the Bush administration supports Abbas and will continue contacts with him. He gave no explanation for a financial decision sure to further the view among Abbas supporters that the United States has not done enough to strengthen him either in his dealings with Israel or with political rivals.
The U.S. humanitarian payments also do not address a current crisis: About 140,000 unpaid employees of the nearly bankrupt Palestinian Authority who with their families account for about a third of the Palestinian population.
Last year the Palestinians received $1.3 billion in overseas aid, out of a budget of $1.9 billion.
Meanwhile, Abbas and the Palestinian prime minister tried to settle some of their differences Friday after Abbas seized more powers from the Islamic militants, including control over security forces.
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