Europeans support U.S. threat to Hamas

~ U.N. warns Palestinian political group must renounce violence or risk losing aid.

LONDON -- Tight-lipped and somber, the would-be shepherds of Mideast peace gave little sign Monday that they think the incoming Palestinian Hamas leadership will knuckle under to international demands to moderate and renounce terrorism.

United Nations Secretary-General Kofi Annan said it is "inevitable" that future aid to a Palestinian government led by the Islamic militant movement "would be reviewed by donors against that government's commitment to renounce violence, recognition of Israel" and other agreements.

"It is incumbent now for all to insist that any future Palestinian government will live up to these obligations," including acceptance of the goal of side-by-side homelands for Israelis and Palestinians, Secretary of State Condoleezza Rice said.

Annan said aid won't stop immediately, after Hamas' decisive victory in Palestinian legislative elections. U.S. and European officials said it will probably take two to three months for a new Hamas government to form and take office, effectively giving Hamas a brief grace period in which to change its ways.

Both spoke after a hastily called strategy session of the so-called Quartet, the group of international would-be peacemakers that includes the United Nations, the United States, Russia and the European Union. That group includes all major donors to the perpetually cash-strapped Palestinians.

The Quartet issued a strongly worded statement that stopped short of issuing an outright threat to the incoming Hamas leadership. Almost immediately, the Al-Arabiya satellite channel reported that Hamas had rejected the demands to disarm and recognize Israel.

European governments have given far more money to the Palestinians than the United States has, and they have often been more sympathetic to Palestinian arguments and complaints.

Although European officials have previously sounded less firm than the U.S. on an aid cut-off, E.U. High Commissioner Javier Solana said Hamas does not have much time.

"Once these conditions are fulfilled, the European Union will stand ready to continue to support the Palestinian economic development and democratic stability, but it has to be compliant with all these conditions which are here," Solana said.

Hamas' surprise victory set the Islamic militant group up to run the next government in the Palestinian territories bordering Israel. But the wary international reaction to its victory raised questions about how the Palestinian Authority would finance its annual budget.

The Palestinian Authority is effectively broke, with a deficit this month in the tens of millions of dollars. In 2005, the first year the Palestinian Authority was headed by someone other than Yasser Arafat, overseas donors contributed about $1 billion of the authority's budget. The total budget is estimated variously at between $1.6 billion and $1.9 billion, with huge shortfalls every year.

U.S. direct aid is a small part of that -- $70 million last year -- but the United States and other donors also contribute large amounts of aid indirectly for humanitarian and development needs. U.S. officials from President Bush on down have said there will be no direct aid for a government that includes Hamas, and other humanitarian assistance will come only on a case-by-case basis.

"The Hamas party has made it clear that they do not support the right of Israel to exist, and I have made it clear so long as that's their policy, that we will not support a Palestinian government made up of Hamas," Bush said in Washington.

Palestinian leader Mahmoud Abbas appealed for continued world support, as did a Hamas leader who said his movement had written to the Quartet asking for direct talks and offering assurances that international aid would not go to Palestinian militants.

"We call on you to transfer all aid to the Palestinian treasury," Ismail Haniyeh, a Hamas leader in Gaza, told a news conference. "We assure you that all the revenues will be spent on salaries, daily life and infrastructure."

Abbas, the U.S.-backed head of the defeated Fatah Party, remains as president but the extent of his power is not yet clear. International donors said they will follow through on aid pledges to what they called Abbas' caretaker government, until Hamas takes over.

Israel said it would stop the monthly transfer of $55 million in taxes and customs it collects from Palestinian workers and merchants to the Palestinian Authority if a Hamas government is installed.

Hamas also has said it would try to turn to the Arab and Muslim world for money if the U.S. and Europe cut back.