Obama Administration Undecided on Palestinian Aid, but Unhappy With Israel for Withholding Funds

By Patrick Goodenough | May 10, 2011 | 4:46 AM EDT

Palestinian Authority President Mahmoud Abbas, right, shakes hands with Palestinian Prime Minister Ismail Haniyeh, from the Islamic group Hamas, in Gaza City in March 2006. (AP Photo/Abdel Alahim Abu Askar/Palestinian Authority, File)

(CNSNews.com) – The Obama administration views as “premature” an Israeli government decision to withhold tax revenues from the Palestinian Authority after the Fatah faction’s unity deal with the Hamas terrorist group.

“We encourage a wait-and-see approach to this,” State Department spokesman Mark Toner said Monday in response to questions about Israel withholding around $90 million in duties it collects on the Palestinian Authority’s behalf.

“We’ve had this announcement [of a Fatah-Hamas unity government], but we haven’t seen any of the details yet,” he added. “And we believe it’s premature to make any decisions.”

Israel attributed its move to Fatah leader Mahmoud Abbas’ decision to reconcile with Hamas, the Gaza-based, U.S.-designated “foreign terrorist organization” whose charter still commits it to Israel’s destruction. Israeli Finance Minister Yuval Steinitz said he ordered the freeze on transferring the revenue until Israel could be certain none would go to Hamas.

Salam Fayyad, whose days as P.A. prime minister are likely numbered, said Israel’s withholding of money would make it impossible to pay P.A. employees’ salaries on time this month. U.N. Secretary-General Ban Ki-moon called on Prime Minister Binyamin Netanyahu to unfreeze the funds.

The Obama administration is itself facing a growing chorus of calls from members of Congress who say U.S. taxpayers should not be funding the P.A. following the unity agreement signed in Cairo last week, unless Hamas shifts its position on recognizing Israel and renouncing violence.

The so-called Mideast “Quartet” – the U.S., Russia, European Union and U.N. – has long asserted that for Hamas to have a political role it must recognize Israel’s right to exist, renounce violence, and adhere to previous signed agreements.

Since the Fatah-Hamas decision was first announced late last month, lawmakers from both parties have raised concerns about U.S. funding.

The Damascus-based leader of Hamas, Khaled Mashaal, holds a press conference at the Arab League headquarters in Cairo, Egypt, on Tuesday, May 3, 2011. (AP Photo/Khalil Hamra)

More than half of the Democrats in the U.S. Senate signed a letter to President Obama Friday, urging him to make clear to Abbas that P.A. “participation in a unity government with an unreformed Hamas will jeopardize its relationship with the United States, including its receipt of U.S. aid.”

“As you are aware, U.S. law prohibits aid from being provided to a Palestinian government that includes Hamas, unless the government and all its members have publicly committed to the Quartet principles,” said the letter.

“We urge you to conduct a review of the current situation and suspend aid should Hamas refuse to comply with Quartet conditions.”

The 27 signatories to the letter, which was initiated by Sens. Bob Casey (D-Pa.) and Robert Menendez (D-N.J.), included Armed Services Committee chairman Sen. Carl Levin, Appropriations Committee chairman Sen. Daniel Inouye, and Homeland Security and Governmental Affairs Committee chairman Sen. Joe Lieberman, an independent who caucuses with the Democrats.

Members of the U.S. House who have taken similar positions include Rep. Ileana Ros-Lehtinen (Fla.), chairwoman of the House Foreign Affairs Committee; Rep. Kay Granger (Tex.), the top Republican on the House Appropriations subcommittee dealing with foreign aid; and Rep. Gary Ackerman (N.Y.), senior Democrat on the House Foreign Affairs Middle East and South Asia subcommittee

Rep. Alcee Hastings (D-Fla.) introduced a non-binding “sense of Congress” resolution last week calling for U.S. aid to be cut to a P.A. government including Hamas until it commits to the Quartet principles.

The 2006 Palestinian Anti-Terrorism Act (PATA) makes U.S. assistance to the P.A. conditional on its compliance with obligations to renounce and combat violence, recognize Israel’s right to exist, and abide by existing agreements.

The administration requested some $550 million in bilateral assistance to the P.A. for fiscal year 2011, and a similar amount for FY 2012.

Toner on Monday repeated the administration’s position that it was waiting to see the makeup of the unity government.

“We understand these [lawmakers’] concerns,” he said. “I would just say as the new Palestinian government is formed, we’ll assess it based on its policies and we’ll determine the implications for our assistance.”

A key decision yet to be finalized will be the appointment of a prime minister to run the unity government until long-overdue elections, both presidential and parliamentary, are held next year.

P.A. Prime Minister Salam Fayyad addresses a news conference in Ramallah on Thursday, April 14, 2011. (AP Photo/Majdi Mohammed)

The incumbent, Fayyad, is an independent who has generally scored high points with Western governments, and Israel, for his stewardship.

But although Fayyad still has Abbas’ support, Hamas wants him out.

A possible compromise candidate could be Munib Masri, 75, a wealthy businessman and head of the Palestine Chamber of Commerce who has been involved in the reconciliation talks. Masri, who was close to the late Fatah and PLO chief Yasser Arafat, is not a member of Fatah or Hamas.

Council on Foreign Relations senior fellow Elliott Abrams, a former deputy national security advisor in the Bush administration, cites concerns about security as well as corruption in a Fatah-Hamas unity government.

“The United States needs to be far clearer: we cannot and will not support any government where Hamas has a real influence and the security forces stop fighting terror,” he wrote Friday. “We must certainly not fund such a government, and indeed once Fayyad leaves we should be very wary of the financial practices of the P.A.”

“We do no favor to any Palestinian who really seeks peace, democracy, and independence if we pull our punches when a murderous terrorist group maneuvers to gain power in – and then take power over – all the Palestinian territories,” Abrams warned.

Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow