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Israel, U.S. won't fund Hamas

Leaders say they won't send financial support to a Palestinian government run by a group dedicated to the destruction of Israel.

JERUSALEM - Israel's acting prime minister on Sunday ruled out contacts with a Palestinian government led by Hamas unless the Islamic group renounces violence, and the defense minister threatened to "liquidate" militants if they attack Israelis.

Acting Prime Minister Ehud Olmert said Israel will stop the monthly transfer of tens of millions of dollars in tax rebates and other funds to the Palestinian Authority if a Hamas government is installed, and U.S. Secretary of State Condoleezza Rice on Sunday ruled out any American financial aid to a Hamas government.

She said Washington wants Arab nations and others to cut off money as well.

With the latest comments, Israel showed no signs of backing down from the hard line it has taken since Hamas won a surprising landslide victory in Palestinian legislative elections last week, and Rice was more definitive than President Bush and other administration officials have been about the future of U.S. aid since the election.

Hamas, which opposes the existence of Israel and has killed hundreds of Israelis in suicide bomb attacks, is expected to lead the next Palestinian government, hurting the chances for a peace deal.

The United States, Europe and Israel list Hamas as a terrorist organization; various Arab governments have contact with the group.

"The United States is not prepared to fund an organization that advocates the destruction of Israel, that advocates violence and that refuses its obligations" under an international framework for eventual Mideast peace, Rice said as she flew to London for a Mideast strategy session with European and Russian leaders and U.N. Secretary-General Kofi Annan.

Humanitarian aid to the Palestinians, many of whom are poor and unemployed, is likely on a "case-by-case basis," Rice said. She indicated that the Bush administration would follow through on aid promised to the current, U.S.-backed Palestinian government led by President Mahmoud Abbas.

Olmert, addressing the weekly meeting of his Cabinet, said he has been in touch with leaders around the world in recent days and received support for the tough Israeli stance against Hamas.

"We clarified that without a clear abandonment of the path of terror, a recognition of Israel's right to exist in security and peace ... Israel won't have any contact with the Palestinians," Olmert said. "These principles are accepted by the international community. On this issue, I don't intend to make any compromises."

Hamas refuses to disarm or recognize Israel, though it has hinted that it could reach a long-term truce or other accommodation with the Jewish state.

Defense Minister Shaul Mofaz said Israel is prepared to kill Hamas militants if the group resumes its attacks.

"Those who head terror organizations and continue to engage in terror against the state of Israel will be liquidated," Mofaz told Channel 2 TV on Saturday night.

During five years of fighting with the Palestinians, Israel killed dozens of Hamas militants in airstrikes, including the group's founder and spiritual leader, Ahmed Yassin.

Since a cease-fire declaration last February, Hamas has not claimed involvement in a suicide attack and Israel has not killed any of the group's leaders.

At a news conference during a visit to Israel, German Chancellor Angela Merkel said Germany will only deal with Hamas if it recognizes Israel and renounces violence. Merkel was meeting Israeli and Palestinian officials but said she would not meet Hamas representatives.

Israeli officials said the ban on contacts did not extend to Abbas, who accepts the Israeli conditions and is eager to resume peace talks. Abbas was elected to a four-year term last year and remains in power.

However, Olmert said Israel will not hand over value added tax and customs funds it collects on behalf of the Palestinians to a Hamas-led government.

Israel has "no intention" of sending funds to terror groups, Olmert told a joint news conference with Merkel.

Every month, Israel transfers an average of $54-million collected at ports and border crossings. In the past, Israel has held up the transfers during times of tension. Such a delay now would cripple the cash-strapped Palestinian government.

U.S. aid is a small part of the $1.6-billion annual budget of the Palestinian Authority.

About $1-billion comes from overseas donors - more than half of that from European nations. The rest is a mix of funds from international donor agencies, Arab and Asian governments, and the United States, which gave $70-million in direct aid to the Palestinian Authority last year.

Separately, the United States spent $225-million for humanitarian projects through the U.S. Agency for International Development last year, and gave $88-million for refugee assistance.

In the past, USAID money has gone for such projects as sprucing up the Ramallah auditorium where Palestinian leaders hold news conferences.

Rice suggested that only the most pressing needs would be considered now.

"We're going to review all of our assistance programs, but the bedrock principle here is we can't have funding for an organization that holds those views just because it is in government," Rice said.

Some in Israel and in the Bush administration would like to isolate and impoverish the new Hamas leadership in hopes of either forcing the group to moderate its policies or hastening disillusionment with the incoming government among Palestinians.

Abbas, whose Fatah Party was routed in last week's election, has asked Hamas to form a new government and now must find a way to work with the Islamists. The arrangement could potentially put Hamas in charge of some, if not all, of the 58,000 Palestinian security forces.

But Fatah leaders say they will not submit to Hamas' authority over the Fatah-dominated security forces. The way Hamas deals with the security forces will prove key to how smoothly the power transfer goes.

"This is one of the biggest challenges facing Hamas," said Moheeb al-Nawaty, an expert on Islamic groups. "The security forces, their members and leaders, will not give in easily."

Hamas will face a struggle to overcome that internal challenge, plus threats of international isolation and a cutoff in foreign funding, to make good on its promises to clean up the government.

Abbas in the past has called on Hamas to disarm, as required in the U.S.-backed "road map" peace plan, but never took action against the group.

Hamas' supreme leader, Khaled Mashaal, said Saturday the group would not disarm but suggested it could fold the thousands of fighters in its armed wing into a Palestinian security force.

Also Sunday, about 7,000 Israeli security forces were training to dismantle two small West Bank settlement outposts later this week, police said. Resistance is expected to be fierce in Amona and among Israeli squatters who took over an abandoned market in the Palestinian city of Hebron.

Israel's Supreme Court rejected a request from Jewish settlers to delay the order, clearing the way for the operation to proceed. It will mark Israel's first evacuation of Jewish settlers since withdrawing from the Gaza Strip and part of the West Bank in August.

[Last modified January 30, 2006, 00:33:11]