The administration seeks changes that would permit aid to Palestinians even if officials backed by Hamas, which has been designated a terrorist group, become part of a unified Palestinian government.

By Paul Richter

Reporting from Washington — The Obama administration, already on treacherous political ground because of its outreach to traditional adversaries such as Iran and Cuba, has opened the door a crack to engagement with the militant group Hamas.

The Palestinian group is designated by the U.S. government as a terrorist organization and under law may not receive federal aid.

But the administration has asked Congress for minor changes in U.S. law that would permit aid to continue flowing to Palestinians in the event Hamas-backed officials become part of a unified Palestinian government.

The aid measures may never come into play. Power-sharing negotiations between Hamas and its rival, the U.S.-backed Fatah faction, appear deadlocked. The two have been bitterly divided since 2007, when Hamas drove Fatah out of the Gaza Strip. Fatah controls only the West Bank.

Nevertheless, the move has alarmed congressional supporters of Israel, who are watching for signs that the new Democratic team at the White House might be more sympathetic to Palestinians than was the Bush administration.

The administration's proposal is akin to agreeing to support a government that "only has a few Nazis in it," Rep. Mark Steven Kirk (R-Ill.) told Secretary of State Hillary Rodham Clinton at a House hearing last week.

The move underscores the quandary faced by the Obama administration in its efforts to broker Mideast peace. President Obama has repeatedly called for a separate Palestinian state. But negotiating a peace agreement, or even distributing aid, will be difficult without dealing with Hamas, which won Palestinian elections in 2006.

The administration requested the changes this month as part of an $83.4-billion emergency spending bill that also contains funding for the wars in Iraq and Afghanistan. The bill also would provide $840 million for the Palestinian Authority and for rebuilding in Gaza after the 22-day Israeli military assault this year. The administration still is wrestling with how to deliver the aid to Gaza because of the tough federal restrictions on dealing with Hamas.

U.S. officials insist that the new proposal doesn't amount to recognizing or aiding Hamas. Under law, any U.S. aid would require that the Palestinian government meet three long-standing criteria: recognizing Israel, renouncing violence and agreeing to follow past Israeli-Palestinian agreements.

Hamas as an organization doesn't meet those criteria. However, if the rival Palestinian factions manage to reach a power-sharing deal, the Obama administration wants to be able to provide aid as long as the Hamas-backed members of the government -- if not Hamas itself -- meet the three criteria.

This position marks a shift from the Bush administration, which disapproved of power sharing and welcomed the collapse of a unity government in 2007 after only a few months.

Clinton defended the administration's position last week before Congress. She said that the United States supports and funds the Lebanese government, even though it includes members of Hezbollah, another militant group on the U.S. terrorist list.

She contended that the United States should try to gradually change the attitudes of Hamas members, as it did with militants in Northern Ireland, where it helped broker a deal that included the Irish Republican Army, even though not all of its members agreed.

"We don't want to . . . bind our hands in the event that such an agreement is reached, and the government that they are part of agrees to our principles," she said.

Discussions of a possible coalition government tend to focus on a team led by someone acceptable to the West, such as Palestinian Prime Minister Salam Fayyad, and staffed largely by nonpartisan technocrats.

Still, some lawmakers are reluctant to support or fund any government with officials who carry Hamas' blessing.

Rep. Adam B. Schiff (D-Burbank) said the proposal sounded "completely unworkable," even if the individual Hamas-backed officials agreed to abide by U.S. conditions.

"You couldn't have the leadership of a terrorist organization pick the ministers in the government, with the power to appoint and withdraw them, and answering to them," he said.

Nathan Brown, a specialist in Palestinian politics at George Washington University, said he considered it significant that the administration was willing to approach Congress with the proposal, knowing lawmakers were likely to be opposed.

"That's gutsy," he said.

Ziad Asali, president of the American Task Force on Palestine, a Washington group that advocates Palestinian statehood, saw the proposal as another of Obama's gestures to adversaries. "This is saying, 'I'm reasonable. I'm trying to make a start. Don't say I haven't tried,' " Asali said.

paul.richter@latimes.com