The United States will cancel or suspend up to $411 million (Ђ337 million) in Palestinian aid out of concern the money could help the new Hamas leaders of the government there, the State Department announced Friday.
At the same time, the United States will redirect some of that money to humanitarian projects for the impoverished Palestinian people. Humanitarian assistance will rise by 57 percent to $287 million (Ђ235 million) over several years, the department said.
Another $13 million (Ђ11 million) will go for new vetting procedures, including a special inspector general, to ensure that even humanitarian aid funneled through the U.N. Relief Agency and approved charities does not end up in Hamas hands, the department said.
The money being cut or suspended includes funds for public works construction, training public officials and revitalizing the Palestinian economy. Of the $411 million (Ђ337 million) that could be cut over several years, $165 million (Ђ135 million) is still under review by U.S. officials.
The United States and the European Union consider Hamas a terrorist organization and each country bans official dealings with it. Hamas won parliamentary elections in the Palestinian territories in January and it formed a government that took power this month. The United States began a review of its aid package to the Palestinians shortly after the election, and has already eliminated direct aid to the Palestinian Authority.
"It is our desire to help provide for the basic humanitarian needs of the Palestinian people," Secretary of State Condoleezza Rice said in a statement read to reporters by department spokesman Sean McCormack. But she added, "The new Palestinian government must take responsibility for the consequences of its policies."
The United States has long channeled most of its assistance to the Palestinians through indirect means, to humanitarian efforts such as food, maternal and child health programs and education and also for projects that only indirectly benefited the Palestinian government. These include such projects as roads, water works and training programs for judges, electoral workers and others.
The United States will redirect about $100 million (Ђ82 million) from canceled projects to humanitarian assistance, the official said. Some of the remaining pot of approximately $140 million (Ђ115 million) will be eaten up in the process of ending or disengaging from those projects, but it is not clear where all the money will go.
The official said the State Department will consult with Congress on the next move. Congress has already approved all the spending under review, and has not yet considered how to apportion new money now that Hamas is in place.
The West has been threatening to cut nearly $1 billion (Ђ820 million ) in annual aid to the Palestinians since the election, which turned out the moderate Fatah Party that Washington had hoped could gradually move toward peace with Israel. Hamas has refused to renounce violence or recognize Israel's right to exist.
Without money from the Arab world, Europe and the United States, a Hamas-led government would be nearly broke, reports AP.