Norway, the only Western country to normalise ties with the new Palestinian government, said Thursday it was ready to resume direct aid to the Palestinian Authority. The announcement once again set the country apart from the EU and US on Middle East policy.
Aid would resume once technical issues concerning banking restrictions imposed on the Palestinian Authority after Hamas swept to power in elections in March 2006 were resolved. "Once the minister says the situation is cleared we will be ready to resume direct budget support to the Palestinian Authority," Foreign Minister Jonas Gahr Stoere said following talks with Palestinian Finance Minister Salam Fayyad in Oslo.
"What remains now to happen is for us to restore the capacity to receive funds," said Fayyad. "That is contingent on the banking restrictions being removed. "When that happens ... Palestine will be ready for business and I expect hopefully that this issue will be resolved very soon," he added.
The international community froze aid to the Palestinians after Hamas came to power. It has called on Hamas to renounce violence, recognises Israel and honours past peace accords before resuming aid.
Norway normalised ties with the Palestinian unity cabinet formed last month by president Mahmud Abbas' mainstream Fatah party, Prime Minister Ismail Haniya's hard-line Hamas movement, and independents, including Fayyad.
The United States and the European Union consider Hamas a terrorist organisation and have not formally recognised the government. Norway, which is not a member of the EU, uses a list of terrorist organisations drawn up by the United Nations, which does not include Hamas.
Fayyad failed to convince the EU to resume direct aid during talks in Brussels on Wednesday, when he urged the international community to save the Palestinian territories from a "very acute financial crisis." EU External Affairs Commissioner Benita Ferrero-Waldner said the EU would continue to redirect its aid, through a special mechanism to help the neediest people while bypassing the government to avoid contact with Hamas.
EU aid in 2006 reached 700 million euros (945 million dollars). Fayyad reiterated on Thursday that he had a shortfall of around a billion euros (1.3 billion dollars). "We have a very acute financial situation," he said. "There is misery everywhere and poverty is widespread."
Norway, which hosted the Israeli-Palestinian peace talks in the early 1990s, said its contribution to the Palestinians this year would amount to 100 million dollars, some of which would be sent through Haniya's office. The Scandinavian country sent the same amount last year but the money was not routed directly to the government.
"We would like to see the aid channelled in a way ... addressing needs but also contributing to what could lead to state building," Stoere said. He said some small amounts had already been paid to the Palestinian education, planning and culture ministries to help fund concrete projects.
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