European diplomats say the US is blocking a plan to resume direct financial aid to the Palestinians.

The European Commission is considering plans to send funds to the office of the president, bypassing the Hamas-led Palestinian government.

…The United Nations estimates that a quarter of the Palestinian population depends on government salaries. The PA employs some 165,000 people.

But the severance of donor funding has meant that the government has been unable to pay wages for March and April.

BBC Middle East analyst Roger hardy says the Bush administration wants to maintain the economic pressure on the Hamas-led government.

The official view in Washington is that if Hamas refuses to recognise Israel, and eventually collapses, it will have no-one to blame but itself.

But, our correspondent says, many in Europe feel that wielding the big stick against Hamas will be counter-productive, and that it is in no-one’s interests for Gaza and the West Bank to descend ever deeper into poverty and lawlessness.
bbc.co.uk

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