Israel releasing $100 million to Abbas before his unity talks with Hamas

~ The money is part of the taxes collected for the Palestinian Authority.

JERUSALEM -- Israel said Thursday it would free $100 million in frozen tax funds to boost moderate Palestinian President Mahmoud Abbas -- the first Israeli payment since the militant Hamas group won Palestinian legislative elections and took office last year.

The move came two days before Abbas heads to Syria for talks with the top Hamas leader to forge a unity government aimed at ending a punishing international aid boycott. The talks have sputtered for months amid deadly clashes between forces loyal to the two sides, killing 35 people. But Abbas' scheduled meeting with Khaled Mashaal of Hamas might be a sign that an agreement is finally at hand, though key obstacles remain.

The $100 million is part of the tax money Israel collects for the Palestinian Authority under partial peace accords, including customs and value-added tax. Israel halted transfer of the funds when Hamas won control of the parliament and set up its Cabinet in March 2006.

Israel said it could not feed money to a Hamas-led government, labeling Hamas a terror group because of its history of dozens of suicide bombings that killed hundreds of Israelis over the past decade. The United States and European Union joined in the boycott, halting the foreign aid that has kept the Palestinian Authority afloat since it was created in 1994. The funding freeze has caused widespread hardships in the West Bank and Gaza.

Humanitarian efforts

An Israeli official said that by today the money would be transferred directly to Abbas for use in humanitarian efforts and to boost his own security force, the Presidential Guard. The official, speaking on condition of anonymity because the decision had not been made public, said Israel was satisfied by assurances the money would not go to the Palestinian Finance Ministry, controlled by Hamas.

Palestinian negotiator Saeb Erekat, who is close to Abbas, welcomed the Israeli move but noted the money rightfully belongs to the Palestinians. "We hope the Israelis will release all the withheld funds," he said. "This is about 25 percent of the total they owe us."

Acting Finance Minister Samir Abu Aishah of Hamas said the government should decide how the money is spent.

"This is supposed to be spent according to Palestinian priorities. It is not for Israel to determine where it goes," he said.

Israel has been trying to boost Abbas in his struggle with Hamas, which rejects the existence of a Jewish state in an Islamic Middle East. However, such efforts can backfire, as Palestinians of all stripes try to distance themselves from the Israelis. A recent report that Israel had approved an arms shipment for Abbas' forces drew angry denials, but witnesses saw weapons fall off a truck.

Abbas was due in Damascus on Saturday, where he was to meet Mashaal for the first time in years. Abbas' Fatah group and Hamas are bitter enemies, and their efforts to form a unity government must overcome deep ideological and political divides.

Only the hardships caused by the Western aid cutoff has pushed them together, forcing them to look for formulas each party could live with -- while satisfying Western demands that the Palestinian government recognize Israel, renounce violence and accept previous peace accords. So far Hamas has refused.

Negotiator Ziad Abu Amr, an independent lawmaker with ties to both factions, said Abbas and Mashaal would try to put the finishing touches on a deal at a meeting in the Syrian capital on Saturday.

"There are issues we have agreed upon and issues that still need agreement, but we are continuing our efforts and did not reach a deadlock," Abu Amr said.

Nimer Hamad, an Abbas political adviser, confirmed the planned meeting, but said two key obstacles to a coalition government remain: Hamas' reluctance to accept a political platform that implicitly recognizes Israel, and control of the Interior Ministry, which oversees the Palestinians' 85,000 security officers. Previous coalition talks have foundered over these issues.

Ahmed Youssef, political adviser to Prime Minister Ismail Haniyeh of Hamas, said he was confident the distribution of posts would be resolved at the Damascus meeting.

In Cairo, Hamas spokesman Mohammad Nazal also confirmed that the meeting would take place and told the AP that Hamas is ready to form a unity government afterward.

Also Thursday, Ephraim Sneh, Israel's deputy defense minister, said Israel and the Palestinians can wrap up a final peace deal within two years, but the international climate for such talks might not remain favorable for long. Sneh and Defense Minister Amir Peretz recently published a peace plan with a two-year framework.

Sneh was speaking at an academic conference at the Israeli seaside city of Netanya. "We have an opportunity, but I don't know for how long will it last," he said. "We have to do it very, very quickly."