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Donors Consider New Ways to Help Palestinians

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Donors Consider New Ways to Help Palestinians

Middle East

Donors Consider New Ways to Help Palestinians

Donors Consider New Ways to Help Palestinians

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Donor nations are discussing ways to help Palestinians while standing by their principles not to aid a Hamas-led government unless it renounces violence and recognizes Israel's right to exist. Officials, desperate to keep pressure on Hamas, are reluctant to talk openly about the proposals.

MELISSA BLOCK, host:

Western donors are quietly considering new ways to channel money to the Palestinians without aiding a government led by the Islamist group Hamas. The U.S. and the European Union consider Hamas a terrorist organization. Donors have been threatening to cut off aid to the government unless it renounces violence and recognizes Israel's right to exist. But with fears of a humanitarian crisis looming, donors are trying to figure out a way to keep some aid flowing. NPR's Michele Kelemen reports.

MICHELE KELEMEN reporting:

When former World Bank Chief, James Wolfensohn, spoke to Congress last week he warned of a crisis if a cash-strapped Palestinian authority can't pay salaries for health workers and teachers.

Mr. JAMES WOLFENSOHN (Former World Bank Chief): Because if you don't pay the civil servants, who themselves support 900,000 people, I'm afraid the frustration would reach a level where you couldn't contain it. So what everybody is now rushing around trying to do is to try and see what are the possible sources of delivery mechanisms.

KELEMEN: U.S. and European officials are reluctant to talk about their options in public because they want to keep pressure on Hamas, but a U.S. official acknowledges that there are active discussions on several proposals. Technical experts are looking into the possibility of a World Bank trust fund to pay salaries directly.

Another idea is to expand the mandate of UNRWA, the U.N. agency that helps Palestinian refugees, to allow it to help non-refugees. There are drawbacks, though, according to Edward Abington, a former U.S. council general to Jerusalem and a lobbyist for the Palestinian authority.

Mr. EDWARD ABINGTON (Lobbyist, Palestinian authority): The problem with all of these suggestions, using U.N. agencies, using UNRWA, using NGO's is that these organizations have, their capacity to implement projects is very limited. We tried this with UNRWA in the 1990s, and it just didn't work.

KELEMEN: The idea of setting up a trust fund for salaries may work logistically, he says. Though, U.S. officials are skeptical it could be done without violating U.S. terrorist financing laws. Abington says Hamas may not even agree to it.

Mr. ABINGTON: Health and education are two of the central components of Hamas' domestic program. and I think they will not be willing to lose control, at least at this early stage.

KELEMEN: This issue if more of a concern for the Europeans than for the U.S., which has only given direct aid to the Palestinian authority on a few occasions, and mainly to pay off Palestinian debts to the Israelis, not to cover salaries or other budget needs. A spokeswoman for the European commission, Emma Udwin, says it's too early to talk about alternative ways to pay salaries. She says the European's are studying the proposed cabinet announced this week and waiting to see what sort of government policies are put in place.

Ms. EMMA UDWIN (Spokeswoman, European commission): The European Union has been the biggest donor to the Palestinian people, around half of whom live in deep poverty. And we would hope to be able to continue supporting them. However, we have, with other partners in the Middle East quartet, set out our principles on which future decisions about aid will be based, and we're not about to go soft on those principles.

KELEMEN: In Washington, U.S. officials are using those principles to review American aid programs. The U.S. is likely to continue to support non-governmental groups and channel more aid through the U.N. system. But Larry Garber, who ran the U.S. Agency for International Development mission in the West Bank in Gaza until 2005 says the aid programs that he thought were most effective are now at risk.

Mr. LARRY GARBER (U.S. Agency for International Development): The ones that I worry about the most, because I think they're the most difficult to justify under the current circumstances, are the true development projects, particularly in the infrastructure sector and in the private sector.

KELEMEN: Garber, now with the new Israel fund, says the U.S. should consider its interests in this. Pointing out that Washington worked closely with Israel when it helped fund water treatment and other big infrastructure projects in the past. But all that sort of work requires some dealings with local authorities, which U.S. officials are now trying to avoid. Michele Keleman, NPR News, Washington.

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