EU Will Facilitate Hamas’s Leader Return to Gaza

International donors threatened to withdraw millions of dollars in aid from the Palestinian Authority today unless Hamas renounces terrorism after its stunning victory in parliamentary elections.

The United States said that it will review “all aspects” of its aid programmes if the militant group Hamas is in government after its victory in this week’s elections.

“To be very clear, we do not provide money to terrorist organisations,” said Sean McCormack, a State Department spokesman.

Israel also threatened to stop transferring customs revenues that it collects on behalf of the Palestinians. Those revenues, estimated at more than $40-50 million a month, are the main source of revenue with which the Palestinian Authority pays 135,000 civil servants and security forces.

“We will face practical problems of how you deal with people that call for the destruction of Israel,” Joseph Bachar, director general of the Israeli Finance Ministry, told the World Economic Forum in Davos.

Mazen Sinokrot, the Palestinian Economy Minister complained that Israel was obliged to make the payments. “This is not donor money,” he said. “If those salaries are not coming, this is a message for violence.”

Hamas, officially listed as a terrorist organisation by the United States and the European Union, gained 76 seats in the 132-seat parliament in this week’s elections. Fatah, founded by the late Yassir Arafat and committed to the peace process, secured just 43 seats.

Meanwhile in the West Bank and Gaza the political situation remained fluid. The Palestinian leader, President Mahmoud Abbas, announced that he has asked Hamas to form a new government.

The senior Hamas leader, Ismail Haniya, said that the two men had agreed to meet shortly to start consultations on “a political partnership” and the make-up of the next administration.

But the first signs of a backlash erupted on the streets of Gaza, when thousands of Fatah members demonstrated outside their party offices, demanding that the group should not agree to be part of a coalition with Hamas.

Angry gangs of young men took to the streets, burning cars and shooting in the air, demanding the resignation of Mr Arafat’s old guard, whom they blame for Hamas’s victory.

Mr Haniya, a possible candidate for prime minister, used a Friday sermon at his local mosque today to urge supporters to stay calm.

“Don’t be afraid. Your money and your lives are all in the hands of God. He will not let you down. If all the nations are gathered to harm you, you will not be harmed if God protects you.”

The US gave the Palestinian Authority $400 million in direct aid last year and several million more through various UN charities Some of the money was handed directly to Palestinian ministries.

“I don’t see how we would do that if those ministries were controlled by Hamas,” said Jacob Walles, the US Consul-General in Jerusalem.

“At this point, Hamas has to make a choice. The onus is on them,” he added. “If you want to be part of the political process … you need to recognise Israel, you need to disarm and you need to renounce terror and violence. The choice is theirs.”

Without Western financial aid, the bankrupt Palestinian Authority, which ran a $1 billion ($.82 billion) operating deficit last year, would almost surely collapse.

Foreign donors have poured about $1 billion annually into the Palestinian Authority, financing vast reconstruction efforts in the West Bank and the Gaza Strip. The United States is the single largest donor country, and along with Europe provides the vast majority of the foreign aid to the Palestinians.

The European Union also gave warning of cutting off aid to Palestinians. It has officially taken the line that it stands ready to continue support, but that also expects Hamas to commit to ending violence and supporting democratic principles.

The European Commission offered an aid package worth €280 million to the Palestinian people last year, of which €70 million was channelled to the Palestinian Authority through a World Bank trust fund.

Khaled Mashal, the exiled supreme leader of Hamas and one of Israel’s most wanted men, has signalled his intention to return to the Gaza Strip following the organisation’s landslide victory.

The European Union is said to be facilitating Mr Mashal’s return from Damascus next week, when he will begin talks with Mr Abbas over a possible political partnership with Fatah.

Quoting sources close to the Palestinian Authority and Hamas, the Palestinian newspaper Al Quds said that the EU was lobbying the United States, which was in turn appealing to Israel not to block Mr Mashal’s repatriation.

A spokeswoman for the Israeli Embassy in London told Times Online that Israel would be powerless to prevent Mr Mashal from entering Gaza through the Rafah border crossing with Egypt.

She said: “The Gaza Strip is not our responsibility. If Mr Mashal wants to go there it is none of our business. It’s for the Egyptian Government to decide whether to allow him to through – I am happy to say that Israel does not have one Israeli soldier or person at that crossing.

“But if he wanted to move from Gaza to Ramallah [in the West Bank] it is a different matter. He is a terrorist. There is no way this person who sent terrorists to kill hundreds of Israelis over the past five years will be allowed into Israel.”

Mr Mashal, a former physics teacher considered by Israel to be the director of Hamas’s terrorist arm, escaped an assassination attempt by Mossad agents in Jordan in 1997. He retains a hardline stance against Israel, and his potential return to help steer his victorious organisation is likely to further enrage Israeli authorities.

Ehud Olmert, Israel’s acting Prime Minister, last night repeated that Israel would not negotiate with an administration that included a terrorist organisation. He demanded that the Palestinian Authority act on a pre-election promise to disarm militant groups.

“Israel will demand that the entire international community compel the PA and its chairman to implement the commitment to eliminate Hamas as a terrorist organisation that calls for Israel’s destruction,” the government announced following three hours of talks last night.