MIDDLE EAST:The EU has said it will restart direct aid payments to the Palestinian Authority shortly.
But the funds will only start to flow when adequate financial controls are put in place by the emergency cabinet set up by Palestinian president Mahmoud Abbas.
"There is going to be a direct relation with his government . . . There is no doubt that part of the money will go into the account of prime minister Fayyad," said EU foreign policy chief Javier Solana yesterday in a reference to the US-trained economist put in charge of the emergency administration.
At an EU foreign ministers meeting in Luxembourg, the Israeli foreign minister, Tzipi Livni, also announced that it would release up to $800 million (€600 million) in Palestinian tax and customs payments to help buoy up the new emergency government.
"We are willing to work with those who support the two-state solution - those who understand and accept the right of Israel to exist," said Ms Livni, who added that the international community had a role to play and Israel would support moderate Arabs.
"This is a moment of truth for Palestinian society," she added.
The U-turn in policy followed the removal of Hamas from the Palestinian government by Mr Abbas last week. He disbanded the Hamas-led Palestinian unity government following Hamas's seizure of the Gaza Strip and routing of Mr Abbas's Fatah forces.
Hamas has rejected the appointment of the new government as a "coup" but the international community has largely welcomed the move and pledged to resume aid.
The EU, which is the biggest single financial donor to the Palestinian Territories, cut off direct aid payments following the election victory of Hamas 18 months ago. It said it could not deal directly with the organisation because it is on the terror list.
But Mr Solana and the EU's external affairs commissioner, Benita Ferrero-Waldner, who oversees aid to the Palestinian Authority, both said yesterday they would restart aid as soon as possible following a meeting with EU foreign ministers.
"The most important is first to have humanitarian aid," said Ms Waldner, who added that she wanted to meet Mr Fayyad as soon as possible. "I think it's for him to tell us what is most needed and are the conditions in place," she said.
EU officials said the emergency cabinet would need to ensure that adequate financial controls were in place and a budget was agreed before the funds could be transferred.
Minister for Foreign Affairs Dermot Ahern said it was important to get funding resumed as soon as possible due to the current grave situation. He also welcomed Israel's decision to release Palestinians taxes, saying it was something that Ireland has been calling for for some time.
Funds to the Gaza Strip, which is under the control of Hamas, could be distributed through UN agencies or the EU's current emergency aid system which sidelines Hamas leaders in the territory, according to EU officials.