WASHINGTON - The Bush administration promised direct financial aid Monday to a new WestBank-based Palestinian government that is amenable to peace with Israel, whileoffering indirect humanitarian aid for Palestinians in Gaza following theterritory’s takeover by the militant Hamas organization.

By Mark Silva and Washington Bureau
June 19, 2007

As the White House confronts a worsening schism among warring Palestinianfactions, perhaps the most critical and elusive challenge lies in bringingabout the reunification of a Palestinian Authority committed to PresidentBush’s long-stated goal of two nations living side by side in peace, a taskfor which the administration acknowledged it has no “magic wand.”
Five years to the week after Bush articulated a goal of a “two-statesolution” for Israelis and Palestinians, the hostile takeover of Gaza byHamas, which the White House calls a terrorist organization and which rejectsIsrael’s right to exist, poses the toughest obstacle yet.
After a tumultuous weekend in which Palestinian President Mahmoud Abbasmoved to establish a new government in the West Bank, the White House acted tobolster Abbas, with Secretary of State Condoleezza Rice announcing the U.S.will release up to $86 million in aid to the Palestinian Authority that hadbeen frozen after Hamas gained control of the Palestinian parliament inelections last year.
Bush also telephoned Abbas to pledge U.S. support for his Fatah Party’s newgovernment.
\Aid to Gaza Strip
At the same time, Rice announced that the U.S. would steer $40 million inhumanitarian aid to Palestinians in Gaza through a United Nations reliefagency, in a bid to prevent roughly 1.5 million Palestinians living there frombecoming victims of the political turmoil and sinking even further intodestitution.
“We are at a critical juncture for the Israeli and Palestinian peoples, oneat which the choices are ever more clear,” Rice said Monday. “We must takehold of this moment to make new progress toward the vision that President Bushlaid out five years ago this week: Two states, Israel and Palestine, livingside by side in peace and security.”
The European Union, traditionally the largest donor to the PalestinianAuthority, also announced Monday that the 27- nation bloc would resume directfinancial aid to Abbas’ government. The money, hundreds of millions ofdollars, will be used to pay civil servants’ salaries, and Abbas’ newgovernment also wants to pay civil servants in Gaza.
The maneuvering came on the eve of Israeli Prime Minister Ehud Olmert’svisit to the White House on Tuesday. Olmert announced Monday that Israel wouldfree more than $500 million in tax collections for the government of Abbasthat had been frozen after Hamas gained power last year.
“We will cooperate with this government,” Olmert said in New York. “Wedidn’t want these moneys to be taken by Hamas in order to be used as part oftheir terrorist actions.”
Bush and Olmert believe the tenuous Abbas-led government in the West Bankholds the best prospect for a peaceful resolution of a deepeningIsraeli-Palestinian conflict. At the same time, experts said, the U.S. cannotsimply abandon the Palestinians isolated within Hamas-run Gaza.
The U.S. for now is trying to walk that delicate balance.
“Hamas sought to divide the Palestinian nation – we reject that,” Ricesaid. “It is the position of the United States that there is one Palestinianpeople and there should be one Palestinian state.”
Bush most forcefully articulated his ideas regarding theIsraeli-Palestinian conflict in a Rose Garden address on June 24, 2002, whenhe said, “My vision is two states, living side by side in peace and security.”Those comments came after the Sept. 11 attacks but before the launch of theIraq war, as Bush faced pressure from British Prime Minister Tony Blair andothers to outline a vision for the Middle East beyond ousting Saddam Hussein.
Some critics fault the Bush administration’s foreign policy – which hasbeen occupied with wars in Iraq and Afghanistan and standoffs with Iran andNorth Korea – for investing relatively little energy in Middle East peace.
“The loss of Gaza caps what I can only call a five-year experience invirtual diplomacy,” said Robert Satloff, executive director of The WashingtonInstitute for Near East Policy. “Five years later, after doing precious littleto implement that vision … the administration has a government in Gazathat is in fact not [just] tainted by terror, it is filled only with terror.”’
\No guarantees
Some analysts suggested that, while Hamas could be doomed to failure nowthat it must govern 1.5 million people without a means of paying for services,the success of Abbas’ moderate government in the West Bank is in no wayguaranteed.
“It’s a lot easier to make sure that Hamas fails in Gaza than to make surethat Fatah succeeds in the West Bank,” said Jon Alterman, director of theMiddle East Program at the Center for Strategic and International Studies.
“Right now, we’re in the honeymoon – everyone wants to support Abbas,”Alterman said. “It will require hard choices not in Week One, but in WeekFive.
“This week, the West doesn’t have a lot of hard choices to make in terms ofsupporting Mahmoud Abbas, but when Abbas starts asking for hard things andasking for Israeli concessions,” he said, that will be the test.
Those requests will reach beyond financial support, Alterman said, andinvolve the movement of people between the West Bank and Israel, the releaseof prisoners and other contentious issues.
Ghaith al-Omari, a senior research fellow at the New America Foundation whowas a political adviser to Abbas, predicted that Hamas, faced now with theresponsibility of governing Gaza, “will fail.” At the same time, he said, “NoPalestinian leader can sit back and watch Gaza starve.” And, he said, Bush andOlmert must reject any “assumption that we can separate the West Bank andGaza.”
Said Robert Malley, director of the International Crisis Group’s MiddleEast program and a former director of Arab-Israeli affairs in the Clintonadministration: “You can’t have a genuine stable peace process if you don’thave a minimal Palestinian consensus. We have to relinquish these notions andmyths that seem to be spreading … of a separate West Bank and Gaza. …You don’t cut off Gaza.”
White House officials say they already have started confronting the newreality of a friendly Palestinian government in the West Bank and a hostileone in Gaza.
“What the president’s doing right now is showing support for our friends,”said White House spokesman Tony Snow. “This is not simply the presidentwaltzing – the president doesn’t have a magic wand.”