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From NPR News in Washington, I'm Michel Martin and this is TALK OF THE NATION. Ever since the militant group Hamas shocked the world by dominating the Palestinian elections, Western donors have faced a dilemma. Here is Edward Abington, U.S. lobbyist for the Palestinian Authority.

Mr. EDWARD ABINGTON (U.S. Lobbyist, Palestinian Authority): We don't want to reward Hamas, given their very obnoxious stands on Israel, and on the peace process, and so forth. But on the other hand, you don't want to create a chaotic situation, where the Palestinian Authority collapses, and Hamas is left standing.

MARTIN: As Hamas gets closer to taking power, so does the time for a decision. How can the U.S. help the people without supporting the government? Where is the line between compassion, principle, and national interest? It's TALK OF THE NATION. First, this news.

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This is TALK OF THE NATION. I'm Michel Martin in Washington. Neal Conan is away. Yesterday, Hamas finalized its choices for a new cabinet and submitted the proposed slate to Mahmoud Abbas, the Palestinian president. None of the more moderate factions joined with Hamas to form a government, and this could make it even tougher for Hamas to secure aid from international donors. It's hard to overstate just how dependent the Palestinians are on outside aid. According to the Congressional Research Service, they are the largest per capita recipients of foreign aid in the world. They depend on outside aid to pay government salaries, keep schools and hospitals open, and to keep their economy afloat. Since the Hamas victory in January, however, the U.S. government has threatened to withhold millions of dollars in aid, because of Hamas's refusal to renounce violence and to recognize Israel.

And the U.S. has urged other governments, which provide even more assistance, to follow suit. Today, we will consider the dilemma of reconciling humanitarian aid and political principle. Later in the program, we will speak to Middle East analyst David Makovsky and get a report from a reporter on the ground.

But first, we will talk to former President Jimmy Carter about the politics of humanitarian aid. We also want to hear from you this hour. How should the U.S. balance pressing human needs and messy political realities? Join the conversation. Our number here in Washington is 800-989-8255. That's 800-989-TALK. Our email address is talk@npr.org. Later in the hour, it's the TALK OF THE NATION Opinion Page. But first, humanitarian aid, and our first guest needs little introduction, former President Jimmy Carter joins us from his home in Plains, Georgia. Welcome, Mr. President. Thank you for speaking with us.

Former President JIMMY CARTER: Thank you, Michel. It's good to talk to you and the folks that listen in to NPR, like I do. I just turned the radio off.

MARTIN: Okay, great. And, of course, our first question is simple, but I'm sure the answer is not. Which is how does the U.S. justify continuing aid to the Palestinians when their new government will not renounce violence, and is committed to destroying a U.S. ally?

Mr. CARTER: Well, you have to realize that the West Bank in Gaza is almost completely surrounded and cut off from any trade or commerce, even travel to the outside world, except through one gate that goes out to Egypt. So, the Palestinians have no way now to trade now with Israel, or to trade with Jordan, or to trade with Europe, and sell their products, or to buy products from overseas. So they're completed dependent on access to the outside world. They don't have any airport. They don't have any seaport, and so forth.

What they have had in the past, though, is some relationship with Israel, a very carefully controlled. Before the elections, for instance, there were 4,000 workers in Gaza who were permitted to go through the gates there, Karni Gate and the Karem Shalom are the two gates, into Israel, to hold jobs. After the Hamas candidates won a majority in the parliament, Israel announced that those 4,000 workers were no longer be willing to carry out their duties of working within Israel. For the last year, one main gate, the Karni is what it's called, has been shut almost full-time by the Israelis. And you may remember the big news story when Secretary of State Rice went from the United States over and helped Jim Wolfensohn, former head of the World Bank to open that gate. As a matter of fact, the gate has still been closed. And in the last few weeks, the gate has not been opened at all.

So, this means that they are dependent on outside funding. That's not exactly an accurate statement because the Palestinians, according to the Oslo Agreement that was negotiated in 1993, and approved by the Israeli government and the United States government, grants the Palestinians, themselves, roughly $55 million in cash, that is their money that's collected from customs and tax revenues. The agreement worked out at the Oslo Agreement was that the Israelis would collect that Palestinian money and turn it over to them. Since the Hamas candidates were prevailed, Israel has announced that it's not going to give the Palestinian their own money. So, even before the Hamas government takes over, about the end of this month, there'll be about $130 million in Palestinian money that will not be delivered to the Palestinian people. It's being held by the Israelis. Well...

MARTIN: So, excuse me, Mr. President. You're saying so at minimum, the taxes collected on behalf of the Palestinians by the Israeli government ought to be released to them. But what about the question from the standpoint of the U.S. taxpayer?

Mr. CARTER: Palestinian money.

MARTIN: Palestin, sure.

Mr. CARTER: Well...

MARTIN: But my question is what about the standpoint, from the standpoint of the U.S. taxpayer? Perhaps someone with relatives in Israel, and you have a government on their doorstep who will not recognize them.

Mr. CARTER: That's correct.

MARTIN: And will not renounce using violence against its citizens, even perhaps civilians, even though there has been a ceasefire in place. How do you explain to a taxpayer why this is in the interest of the U.S. to continue to offer some form of aid?

Mr. CARTER: Well, that's what I was going to come to. The (unintelligible) was over there monitoring the election when the Palestinians, there was a very successful, and fair, and open, and honest election when the Hamas won an advantage. I don't advocate United States giving direct aid to the Hamas government at all. What I do advocate, though, is two things. One is that Israelis turn over money that is already Palestinian money. And secondly, if the United States wants to prevent chaos and suffering among the Palestinian people, we can give funds, bypass the Hamas government completely and let the funds go through UNICEF for education, say, and welfare. We could let the money go through the United Nations High Commission on Refugees to refugees that live in Gaza. They have 1.3 million people that live in Gaza. And in the last year, their personal income has dropped 40 percent just between 2001 and 2002. And the World Bank issued a report this past weekend that the people themselves, forget about Hamas just a moment, their unemployment rate is going to double within this 12-month period, and will go down, income will go down 30 percent this year.

So, I think that if we punish the Palestinian people, themselves, who're already suffering severely, it's going to increase tension, increase animosity toward the United States and Israel, and also, make a hero, in effect, out of the Hamas leaders who don't deserve to be heroes.

This all can be done, that's been advocated by the World Bank, by me and by many others, without dealing with Hamas government at all, but dealing directly with the Palestinian people, by giving them a chance to sell their tomatoes and their so forth that are grown in the hot houses in Gaza, and just letting them have humanitarian aid bypassing the Hamas government completely.

MARTIN: Can you really, though, help the people without propping up the regime?

Mr. CARTER: Well, there's no doubt that you could punish the regime by starving the Palestinian people. Yes, you could do that, if that's what is desired. But I don't believe that that's what the American people would like to do, just to punish Hamas candidates who were successful by letting this, their own constituents, many of whom voted against Hamas, by the way, starve to death and not be able to sell their tomatoes and their peppers, and so forth that they've grown in the greenhouses. You have to remember that U.S. funds went in and bought the greenhouses that the Israelis had operated in Gaza, and turned it over to the Palestinians with a great deal of fanfare. The big article in the Washington Post this past weekend was that they are having to dump all those tomatoes and peppers in the gullies to rot.

They can't sell them anywhere because the gates around the Gaza area were closed. Well, I don't think that is beneficial to peace. Immediately, it's not conducive to the promotion of democracy and freedom, and it certainly is not good just to punish people because of the way an election turned out.

MARTIN: The U.S. is not the biggest donor. As you know, the Europeans are. But do you think there would be a consequence if just the U.S. were to withhold its aid, even in the limited fashion that you're describing, which is to have it go to humanitarian organizations.

Mr. CARTER: Yes, that would be a consequence, but, you know, I have never, I was over there, as I said, once before in this interview, when the election took place. I immediately announced to Hamas, even before the election results were given, that they were not going to get any more U.S. aid if they were elected. And I have never advocated that the U.S. give aid to the Hamas government. But I think that we can give our aid through humanitarian agencies that are already established through the United Nations. And that's exactly what the World Bank is advocating as well.

MARTIN: One of the things for which you are most, I think, recognized post presidency is your intervention with North Korea in 1994, when we were on the brink of a confrontation over its nuclear program. And I remember you were saying in interviews subsequent to that that we really have to continue to talk to people. We cannot cut off direct discussions with people, even if they are part of, sort of, despised entities. Do you think that's what's part of the issue here? Is that par of what informs your point of view about this?

Mr. CARTER: Well, my point of view is not to talk to Hamas. You know, I'm not advocating that now. The only thing that I'm deeply concerned about is the Palestinian people, whom I know are already suffering, let's not punish them. In doing so, I believe this actually helps Hamas. I think the same thing happens now in Cuba where we impose very severe trade restrictions on Cuba. We won't let them, if they win the championship, or classic baseball game tonight, they can't get any funds to go to Cuba. And I think this punishes not only the people in the country or in a regime like in the West Bank and Gaza, but it tends to make heroes, undeserved heroes, out of Fidel Castro and Cuba, and out of Hamas people in the West Bank and Gaza. This is not what we want. I think we want to cement good relationships and trustworthy relationships with the people themselves. And I'd point out that the only official organization in the West Bank and Gaza that's recognized by Israel is the PLO.

They do not recognize, by the way, the Palestinian Authority, where Hamas, which Hamas will lead by the end of this month. The PLO is headed by Mahmoud Abbas, who's Abu Mazen. If the United States wants to negotiate, or Israel wants to negotiate with the Palestinian people, they can do it through the PLO, which is headed by Mahmoud Abbas. So, there are ways to do this diplomatically and without any surreptitious bypassing of proprieties. Isolate Hamas, yes. Just don't punish the Palestinian people.

MARTIN: Mr. President, thank you so much. Thank you so much for your time today...

Mr. CARTER: Been a pleasure talking to you...

MARTIN: Former President Jimmy Carter...

Mr. CARTER: ...Michel.

MARTIN: ...joined us from his home in Plains, Georgia. Thank you. We are talking about humanitarian aid and the line between compassion, principles, and national interests. We'll take your calls after a short break. Call us on 800-989-8255. You can send us e-mail, the address is TALK@NPR.org. I'm Michel Martin, it's TALK OF THE NATION from NPR News.

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MARTIN: This is TALK OF THE NATION. I'm Michel Martin in Washington, sitting in for Neal Conan. We're talking today about the politics of humanitarian aid. You're invited to join the discussion. Give us a call at 800-989-TALK. Our e-mail address is TALK@NPR.org. Last week, the World Bank issued a report warning of dire consequences if too much foreign aid is withheld from the Palestinians. But the economic impact of Hamas' victory is already being felt. The United States has requested that $50 million in reconstruction projects be returned and Israel is withholding millions of dollars of tax revenues. For more on the economic picture on the West Bank in Gaza, we go now to Scott Wilson, the Jerusalem bureau chief for The Washington Post. He joins us from his home in Jerusalem. Welcome, Mr. Wilson.

Mr. SCOTT WILSON (Jerusalem Bureau Chief, The Washington Post): Thanks very much.

MARTIN: You visited the Gaza Strip recently. What is the situation like there now?

Mr. WILSON: Well, it's increasingly dire, actually. The closing of the crossings has put the economy in a very desperate situation, along with the fact that the Palestinian Authority is having a lot of trouble paying salaries to about 150,000 employees and trainees that work for them. Most estimates say that a million Palestinians rely on those salaries for their livelihood. And with Israel freezing those tax revenues after Hamas' victory, United States asking for its money back and an increasingly, an international climate that's freezing up funds to the Palestinian Authority, it's been very difficult to get much money into the economy...

MARTIN: I'm sorry, but...

Mr. WILSON: ...frozen.

MARTIN: Scott, but hold on a second, but most governments have, to date, not cut off the Palestinians, isn't that true? So, why then is there such difficulty already?

Mr. WILSON: The economy, if you take a look at the monthly budget of the Palestinian Authority is $165 million. The Israelis, the tax revenues that have been frozen account for about a third of that. And that's about half the payroll. Before Hamas even won, they were operating, the Palestinian Authority was operating at almost functionally bankrupt, at a large, about a 50-percent monthly deficit. So there were big problems coming into this. A lot of it had to do with the history of corruption. A lot of money had been stolen over the years, up to $700 million in the past decade or so. And so, those things were all adding up as well. So now with the latest freezing of funds, this $55 million means a lot to a government with not a very big monthly budget.

MARTIN: You heard former President Jimmy Carter talking about some of the few routes to the outside world, the Karni crossing's one of them. Have the Israelis opened it again or is still closed or is it open on a limited basis?

Mr. WILSON: It's closed. They were talking yesterday, the U.S. ambassador here yesterday summoned Israeli and Palestinian delegations to Tel-Aviv to try to get some kind of an agreement to open, at least the Karem Shalom Crossing, which is farther to the south and something the Palestinians don't want to use because it's very far from the economic center of Gaza. But they did agree to open that up to get some humanitarian aid in through Egypt. And then, this morning, the prime minister, Acting Prime Minister Ehud Olmert ordered that Karni be opened to incoming humanitarian aid. But it was only opened for about half an hour before the Israeli military closed it again, citing security concerns. So Karni is closed to both exports and imports.

MARTIN: I'd like to bring up a caller into the conversation, but before we do, what is the mood there like among the folks living there? How are they, do people tie their current circumstances to the election results? And how do they feel about that? How do they talk about that?

Mr. WILSON: It's a very good question and the responses are all pretty different. I mean, people tie their concerns, mostly the blame is placed on Israel, as it has been for quite some time, for any number of reasons. The United States is blamed for serving Israel's interest in the eyes of the Palestinians. And there is a sense that they voted, even supporters of the rival Fatah Party, that there was an election, that as President Carter said, it was deemed free and fair, that Hamas won, and that now the money is gone. And that they're being punished for this vote at a time when the United States was promoting democracy in the region. So there's quite a bit of frustration and the sense that the international community is somewhat hypocritical about some of these democratic claims that it's pledging.

MARTIN: Is it frustration, anger, depression, resentment, all of it?

Mr. WILSON: It's depression. Take today in Gaza, for example, Mahmoud Abbas was down overnight receiving Hamas' list of candidates for the cabinet. He was scheduled to leave Gaza today and the members of the Al-Aqsa Martyrs Brigade, which is the armed wing of his own Fatah Party, blocked the streets that he was going to use. There was gun fighting. Six people were wounded. They're demanding jobs, they're demanding higher salaries, they're demanding any kinds of, any number of things, and that's just one very small example of the kinds of frustration and sporadic lawlessness that you see down there these days.

MARTIN: Let's go to Norwich, Connecticut, and Adam. Adam, what's on your mind?

ADAM (Caller): Hi. Why can't the people in Gaza trade directly with Egypt? The Gaza borders on Egypt, doesn't it? Why is the crossing with Israel so much more important? Why are they totally cut off?

MARTIN: Thanks, Adam.

Mr. WILSON: That's a good question. They can't trade with Egypt because they're part of a customs agreement with Israel that was part of the 1993 Oslo courts. President Carter talked about the tax revenues that Israel collects on behalf of the Palestinian Authority, that's roughly $55 million a month. That's part of the same agreement. It's called the Paris Protocols that were signed in the wake of the Oslo accords. And so all goods between Gaza and Egypt pass through the Keram Shalom Crossing, which is in Israel. And that is inside the so-called customs envelope. So there is no direct trade between Gaza and Egypt. Only people can pass through that Rafah crossing between Gaza and Egypt directly, not goods.

MARTIN: Let's go to Jay in Dallas, Texas.

JAY (Caller): Michel?

MARTIN: Yes, Jay? Welcome.

JAY: Yes, good afternoon. Actually, just for the record, I'm not an Israeli or Palestinian, but I am very familiar with that, what is going to happen. That's my prediction and I hope that's not going to happen, this is just forcing and it's playing right in the hands of Hamas. Hamas will eventually be greeted and accepted or backed by extreme regimes, perhaps Russia, China, Iran, other regions. This could happen, very likely, many say. I just want to give you a brief history on Hamas. Hamas started in 1979 in Alexandria, Virginia, by an Israeli Mossad. History doesn't show that, but it's a fact. To undermine the PLO, I'm sure this is not in the history, but the reverse happened here. Also, my concern for the next 50 years, 50 years of suffering, for especially for the Palestinians who will be massacred and in refugee camps. Another 50 years will go on like that and I'm really concerned about the U.S. seen as a double standard in the region. And last point, if I may...

MARTIN: Well, Jay, I think you've given us plenty to work with here, so thanks. Why don't we let Scott answer your question? I mean, I think your initial question was, doesn't this then open the door to Iran and China and other governments to step into the breach?

Mr. WILSON: That is the big fear of both the Israeli government and the U.S. government and the European Union, as they try to figure out how to approach this next government that Hamas is going to be the cabinet of. Iran has already called on other Islamic nations to step in and fill this financial gap. They've pledged not a specific amount, but they've said that they would their best to fill in the spending shortfall, the funding shortfall. So there is a problem. And Hamas has said that they have, as part of the Muslim Brotherhood, which they are, have contacts in more than 80 countries, and have been very confident about the fact that they can get this money. Now that might be political bravado, but nonetheless, it is a real concern, and one of the issues that these international donors and Israel are weighing as they approach this stuff.

MARTIN: When does Hamas actually assume power?

Mr. WILSON: It'll probably happen after the Israeli elections, which are next Tuesday. Mahmoud Abbas now has the cabinet that Hamas has nominated. He doesn't have the power to kill the cabinet before it's approved, but he can fire the cabinet right after it's approved by the Palestinian Legislative Council. But he has, most likely will wait until after the Israeli elections, his aides are saying, gives Hamas more time to recruit other parties to the cabinet. They were unable to get any other parties to join it. And, namely, Abbas' own Fatah Party, which has been the chief partner in past agreements in Israel and would go a long way towards softening the image of this next government. And, so that'll probably happen in the next couple of weeks.

MARTIN: Now, Scott Wilson, you said that publicly, Hamas is hanging tough. They've shown no sign of concern. But do you have any sense of whether privately there is a concern among individuals, whose families live there too, one would assume, and would also be affected by the loss of access of food and...

Mr. WILSON: Yeah.

MARTIN: ...and to medicine...

Mr. WILSON: Yeah, there is. There's a lot of concern, I think, both by official Hamas and their supporters. I mean, and their Prime Minister does admit, Ismail Haniyeh has called on the international community not to cut off funding. So, it's not something that they're saying, sort of, do whatever you want to do. They're hoping it doesn't happen. And certainly people in Gaza right now are feeling the effects of a squeeze already. Talking about, earlier, the financing, the United States has asked for its $15 million back also. So, that in addition to the $55 million that Israel has frozen, that's a lot of money for only one month. That's most of its budget for one month. So that's why they're feeling this stuff already. And, yes, there's a lot of concern that things are going to get worse before they get better.

MARTIN: Scott Wilson, Jerusalem bureau chief for the Washington Post. Scott, actually, I'm going to ask you to stand by if you could because I'm going to bring in another guest, if you can, if you'd stay with us, since we have more questions from callers. But now we'd like to go to David Makovsky, the director of the Project on the Middle East Peace Process at the Washington Institute for Near East Policy. He joins us here in Studio 3A. Thank you for coming in.

Mr. DAVID MAKOVSKY (Director, Project on the Middle East Peace Process, Washington Institute for Near East Policy): Good to be with you, Michelle.

MARTIN: Now, you heard President Carter speak earlier about withholding aid, his fear that it would provoke a backlash. You heard a caller say this could open the door to other players, like Iran. Are those legitimate concerns?

Mr. MAKOVSKY: Yes. I think, I agree with the president that we need to find a way to help the Palestinian people without helping the Hamas government. I don't think we should be scared that Iran is going to make up the shortfall. Iran is facing a lot of its own economic problems. The amount of support it's giving to Hezbollah, its long time ally in the region, is really a fraction of the amount of money that would be required here. So, I think that's sometimes used as a scare tactic. I don't think it will materialize, partly also because Hamas doesn't want to be dependent upon Iran. Iran's closest proxy among the Palestinian rejectionist group is Islamic Jihad. So if they bostler support to anyone, it will probably be to them.But getting back to the broader problem, the one of where do you draw the line essentially?

How do you avert a humanitarian crisis, which I think is important? How do you ensure that the PA doesn't collapse? If it collapses, frankly, Ehud Olmert wants to get Israel out of most of the West Bank. If it collapses, Israel is back in the Gaza, and it's back in everywhere.

At the same time, there's no entitlement to budgetary assistance. I think President Carter would agree with that, as well. So, I think you just need some principles here, which is find a way to ensure humanitarian assistance comes to target those non-Hamas reformers who are committed to a two-state solution, to reform and to peace, and also look for, frankly, through the NGOs, and I think President Carter mentioned that too,those groups that might have an interest in an alternative form of education. You want to keep the democratic institutions alive. You want there to be a second election so Hamas could fail on its own. I think there are ways here of helping the Palestinian people without helping Hamas. And I'll just give two examples...

MARTIN: Hold on, I'd like to hear that. But before we talk about that, does anybody believe in cutting off aid entirely?

Mr. MAKOVSKY: I don't think you hear anyone say cut off all humanitarian assistance. I don't think that option is out there. There's a Congressional bill that is winding its way through Congress, but even that bill, which has seemed fairly restrictive, isn't calling, as far as I understand, for humanitarian assistance. Of course, people get the definitions, how do you find humanitarian assistance? But, look...

MARTIN: I need to take a short break to say, you're listening to TALK OF THE NATION, from NPR News. And I'm joined by David Makovsky, who is the director of the Project on Middle East Peace Process at the Washington Institute for Near East Policy. You were going to tell us how you can support the Palestinian people without propping up the regime. How would you sort of narrowly target aid to accomplish that objective?

Mr. MAKOVSKY: Well, I would, again, I would look for the humanitarian assistance, the educational sources through legitimate, and there are some NGOs, non-governmental groups, that are not legitimate, they are fronts for Hamas, so there needs to be some careful vetting. The central population and democratic caucus that would ensure there would be further elections. But, look, you've got to think about the Palestine Investment Fund. That is money that was old corruption money during Arafat's time that has been recovered by Salaam Fayyad, the former finance minister. There's over $600 million in that fund. You've got Palestinian banks are capitalized at over $4.5 billion. They're just sitting on the money...

MARTIN: Why?

Mr. MAKOVSKY: Well, because they don't want to make loans, because they don't know if they'll get reimbursed. You've got Arab oil states that have had windfalls of Arab oil. During the Beirut Summit in 2002, the Arab states committed to $55 million in emergency assistance to the Palestinian Authority, Michel, do you know how much they actually gave? They gave nine million. Seven million of it was from the Saudis. So when the oil was half the price that it is today, they weren't providing what they said in 2002. I would think that there are sources here that could help pick up some of the slack to help Hamas, but I don't think that the American taxpayer or the European taxpayer must subsidize a group that's on its terrorist list.

MARTIN: I'm still confused though about how that line gets drawn. Are you saying that non-governmental organizations should remain on the ground? But they're the ones who receive the bulk of the aid now from the United States, don't they? I mean, the U.S. direct assistance to the Palestinian authority has been very sporadic at best, and it is not ongoing now. So, in its essence, you're saying that the U.S. status quo should continue?

Mr. MAKOVSKY: Well, look, the big issue is going to be on what's called development fund. Like you have a water carrier that's a north/south carrier in Gaza. That doesn't go through an NGO. But partly it's the United States pays a contractor money to do it because it doesn't trust the Palestinian authority, because as you mentioned, because issues of corruption. So, do you continue that and say, look, that is an existing project, it's not a new project, and frankly, if the water goes bad, it will have terrible humanitarian implications? I think that needs to be solved, yes, on a case by case basis and maybe there will be a case where you would keep it going. But some of the funding in recent years has to been to give direct budgetary assistance, and that I think you'd have to cut off.

MARTIN: We're about to go to a short break. We'll finish this discussion with David Makovsky when we return, plus the TALK OF THE NATION Opinion Page on how to define a Civil War. I'm Michel Martin. It's TALK OF THE NATION from NPR News.

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MARTIN: This is TALK OF THE NATION. I'm Michel Martin in Washington. Right now, we're talking about the politics of humanitarian aid. Our guest is David Makovsky. He's the director of the Project on the Middle East Peace Process at the Washington Institute for Near East policy. And we also have Scott Wilson, Jerusalem bureau chief of the Washington Post. Let's go to a caller. Margaret May in Fort Benning, Georgia. Margaret, what's on your mind?

MARGARET (Caller): Well, I'm trying to figure out how exactly do they, are they able to get someone that is both trusted by the United States and respected enough by the Palestinians to be able to make sure that the humanitarian aid actually gets to the hands where it's needed and not into the hands of government officials that would use the money for weapons and allow mothers and children to starve?

MARTIN: That's a good question. I think I would like to hear from both David and Scott on this point. Thank you, Margaret.

Mr. WILSON: Well, I guess that they were thinking for a while, international leaders, were thinking for a while of some way to get the money directly to Mahmoud Abbas, and that he would disburse the money. But this sort of counters exactly what they tried to work against a few years ago when they put, when they began the position of Prime Minister under Yasar Arafat to basically diminish the power of the presidency, to create institutions in the Palestinian Authority. And then the idea now that they would sort of finance the presidency and nothing else runs counter to that idea, and I think that that has less traction than it used to, say, even just a couple of weeks ago. So it's a very difficult question. I'm not sure how to answer it. It's going to be a real challenge.

MARTIN: David?

Mr. MAKOVSKY: I think the key is working with legitimate NGOs, non-governmental organizations, that have been vetted by the international community, by the United States. It's not a new phenomenon. The United States has been working, as you pointed out, Michel, with NGOs for years. There are legitimate ones who are committed to non-violence and co-existence. And I think you just need to work more closely with them.

MARTIN: How do you really differentiate between humanitarian aid and development aid? If you were to build a water pipe, if you were to improve the sewer system, clearly that benefits the neighborhoods. But wouldn't that be seen as something that the government does? And wouldn't it, by definition, give the Hamas government a sense of efficacy?

MARTIN: Right. Well, that's exactly the sort of arguments going on now in Congress, which is that the Hamas will claim political credit. The question will be is if you don't finish it, will you create a humanitarian crisis in the water supply? It's a case by case sort of distinction. Some say, well, finish existing projects. Don't start new ones. But I think you put your finger on where the debate is moving, which is no one is debating, no one wants starving Palestinians, not the Israelis, not the Americans, not the Europeans. The issue will be on the question of development programs, these big infrastructure projects like roads, and water carriers, and things like that. And I think you just have to make judgment calls.

Mr. WILSON: I think that's part of it, but at the same time, by working, you're asking, there's a public health system to be run. There's a public education system to be run. NGOs don't do these kinds of things. And the U.N. just wrote a report saying it would be impossible to essentially privatize the public health system in the Palestinian territories. Running health clinics is one thing, but running an entire program I think would be a real challenge, according to the reports that I've seen from the U.N. and the World Bank, and after talking to Israeli officials, as well, that there are some things that can be channeled to NGOs working on the ground now, competent ones that had been vetted that are good at building things, and can finish projects. But running an actual government, I'm not sure that they've picked NGOs that are capable of doing that.

MARTIN: We only have a couple of seconds left. So, I wanted to ask David Makovsky about the upcoming elections in Israel. How is this situation affecting the Israeli elections?

Mr. MAKOVSKY: Well, so far, with the bombs not going off since the Hamas victory, there hasn't been this kind of sharp turn to the right as some predicted. Ehud Olmert as this new Centrist Party has been able to capitalize on this public sense of anxiety that there really is no partner. It was 77 percent believed that even before Hamas won. With Hamas winning, it's gone up to probably around 90 and above. So, the key thing here is he's basically saying Israel is not going to be held hostage to the irresponsibility of the other side. Israel's got to take an initiative, and take its fate into its hands. And what he has put forward, it's unheard of, almost, in an election year in Israel to put forward a controversial idea. Which is to say, the 60,000 settlers, basically, that are scattered across the West Bank, on the "wrong side of the fence," which is about 92% of the West Bank, an overwhelming percentage of the West Bank, he hasn't named the figure, but he's made it clear that Israel wants to pull out, to disengage the settlers.

Maybe not the Army, because Hamas could stage rocket attacks against Israeli cities, but basically, to unilaterally disengage. And I think he will point to his victory, which the polls point to, on March 28th, as a sense that he has a referendum for this idea, but it's a very formidable, daunting task, and there'll be serious opposition within the country to block him.

MARTIN: David Makovsky, the director of the Project on the Middle East Peace Process at the Washington Institute for Near East Policy. He joined us here in Studio 3-A. Thank you so much for coming in.

Mr. MAKOVSKY: Thank you, Michel.

MARTIN: And we were also joined for Scott Wilson, Jerusalem Bureau Chief for the Washington Post, who joined us from his home in Jerusalem. Scott, thank you so much for coming in also.

Mr. SCOTT WILSON (Jerusalem Bureau Chief, the Washington Post): Thank you.

MARTIN: This is TALK OF THE NATION.

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