Israel to Cooperate With Palestinian Authority for Now

By STEVEN ERLANGER

Published: February 7, 2006

JERUSALEM, Feb. 6 — Israel will continue to cooperate with the Palestinian Authority and its interim government so long as Hamas is not represented there, the acting prime minister, Ehud Olmert, said Monday.

He said Israel would maintain diplomatic relations with the Palestinian president, Mahmoud Abbas, known as Abu Mazen, whose position was not directly affected by the sweeping victory of Hamas in the legislative elections late last month.

"I have no interest in harming Palestinian Authority chairman Abu Mazen, as long as he doesn't cooperate with Hamas and as long as the Palestinian government isn't led by Hamas," Mr. Olmert told an Israeli-European economic conference in Tel Aviv.

"As long as it doesn't contain a Hamas government, we will speak and cooperate" with the Palestinian Authority "with the intention of strengthening those who acknowledge the right of Israel to live without terror and within safe borders," Mr. Olmert said.

As Palestinian president, Mr. Abbas oversees the security services as commander in chief. But when Yasir Arafat was alive, the United States pressed for the creation of a new post of prime minister and a cabinet, both approved by the legislature. Under that arrangement, the prime minister is chairman of the Palestinian security council, and the interior minister is in charge of the various security forces.

The election of Hamas, which will control the prime minister's post and the government, has made those arrangements awkward for the United States and for Mr. Abbas, who says he intends to try to regain full control over the Palestinian security forces and their budget.

Israel and the West were taken aback by the victory of Hamas, a group they consider a terrorist organization, and are now looking to Mr. Abbas as if he, whom they criticized for weakness when his Fatah faction controlled the government, has somehow become stronger after Fatah's defeat by Hamas.

Mr. Olmert spoke one day after his government decided to transfer some $54 million in tax and customs revenues, collected by Israel but owed to the Palestinians, to the Palestinian Authority. But he warned that the money would not be given to a government containing Hamas figures.

Israel was under considerable pressure from the United States to release the money so the Palestinians could pay 140,000 employees, including some 58,000 members of the security services. But the payment was sharply criticized by the Likud Party as a gift to Hamas.

The United States is trying to put off the day that Hamas takes control until after the Israeli elections on March 28, so that financing can continue to flow to pay salaries. James D. Wolfensohn, the representative of the United States, the European Union, Russia and the United Nations — known as the quartet — will visit the Arab countries in the Persian Gulf region to raise up to $300 million for the Palestinian Authority.

Even with the tax and customs receipts, the authority still has a monthly deficit of $50 million to $60 million. Saudi Arabia has pledged $100 million, and some states, like Qatar, have pledged a few million more to get the authority through January and February.

The World Bank trust fund withheld a payment of $60 million in December when the Palestinian Authority broke its commitment to be more fiscally responsible. The money is mostly from the European Union, and there is pressure from Washington to pay the money anyway. The World Bank would prefer to give the money back to individual donor countries for them to pay the Palestinians, rather than undermine its demands for structural reform.

The Palestinians, meanwhile, are dealing with the embarrassing fallout of a major corruption scandal among Fatah leaders of the Palestinian Authority.

Mr. Abbas ordered the investigation kept quiet until the Palestinian elections were over, but the Palestinian attorney general, Ahmed alMeghani, disclosed a corruption scandal on Sunday that could involve the stealing of billions of dollars by high-ranking Palestinian officials.

Mr. Meghani said he had arrested 25 people and issued warrants for others, some of whom who have fled the territories since Hamas won on Jan. 25. The disclosures are awkward, given the Palestinian Authority's current need for money.

Hamas leaders gathered Monday in Cairo for talks with the Egyptians on a new Palestinian government. Hamas leaders have made contradictory statements about whether they would deal with Israel, and whether they would seek money from Iran, which opposes any peace treaty with Israel and already helps to finance Hamas and Islamic Jihad, another radical faction.

Separately, the Israeli organization Peace Now said Monday that the number of Israeli settlers living in occupied territory in the West Bank — not including East Jerusalem, which Israel annexed in 1967 — increased in 2005 by about 7,000 to 250,000 settlers, even after the pullout of some 9,000 Israeli settlers from the Gaza Strip and northern West Bank last summer.

The settler population is increasing at 5.5 percent a year, Peace Now said, compared with a 1.8 percent for the overall Israeli population. No new West Bank settlement outposts were established in 2005, but 52 illegal outposts were established since March 2001, when Ariel Sharon became prime minister.

Before his stroke, he promised Washington to get rid of them, though the Israeli government says that only 24 outposts constructed since March 2001 remain. An additional 200,000 Israelis live in East Jerusalem, which much of the world regards as occupied but which Israel considers an integral part of its capital.

Also on Monday, Israeli forces fired rockets at a car in northern Gaza, killing two Palestinians who it said were members of Al Aksa Martyrs Brigades.