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Last Updated: Monday, 13 March 2006, 14:33 GMT
Egypt warns against Hamas embargo
Israeli military checkpoint at Kalandia, near Ramallah
There are warnings of a severe humanitarian crisis in Palestinian areas
Egyptian president Hosni Mubarak has appealed to the international community to continue providing financial aid to a Hamas-led Palestinian government.

On a visit to Austria, he said cutting off such support would cause suffering and encourage terrorism in the region.

Mr Mubarak met President Heinz Fischer during his Europe tour to discuss Hamas and Iran's nuclear programme.

He is expected to meet Pope Benedict at the Vatican later on Monday before returning home to Egypt.

On Friday, the European Union threatened to cut off aid to the Palestinian Authority if the Hamas militant group did not give up violence and recognise Israel's right to exist.

Palestinian Authority President Mahmoud Abbas is scheduled on Tuesday to be in Austria - which holds the six-month presidency of the European Union.

On Sunday, the US said it was considering adding to the humanitarian aid it gives to the Palestinians, but warned Hamas to bow to international pressure.

"The roadmap is the way for a better life for the Palestinians," said Secretary of State Condoleezza Rice referring to the US-backed peace plan adopted in 2003.

"Whatever government they form needs to make clear to the international community pretty soon that will be the policy of the government," Ms Rice said.

'Important choices'

Washington is banned under US law from providing aid directly to a government led by Hamas, which it considers a terrorist organisation.

The US is currently reviewing its aid package to the Palestinians to ensure no funds will go to Hamas militants who won Palestinian parliamentary elections in January.

PALESTINIAN ECONOMY
GDP: $3.3bn
Population: 3.6 million
GDP per person: $934
Foreign aid per person: $469
Change in GDP per person since 1999: -38%
Poverty rate: 48%
Unemployment rate: 27%
Source: World Bank

However, Ms Rice said there may be means to bypass Hamas-led institutions while sending more aid to alleviate the hardship in Palestinian areas.

"We are looking at ways to even increase our humanitarian assistance to the Palestinian people during this period of time, but there are important choices that the Palestinian people face concerning the roadmap and the quartet requirement," she said.

The Middle East quartet - Europe, Russia, the US and the UN, which jointly sponsored the roadmap - is asking Hamas to renounce violence, recognise Israel and adopt past peace agreements.

Correspondents say the US does not want to be seen as ignoring the plight of Palestinians in the occupied territories while it maintains its hard line on Hamas.

Ms Rice is embarking on a two-day visit to the world's most populous Muslim nation, Indonesia, where she may seek to pressure Hamas to change its policies.

1: Distributed through World Bank $85m
2: For Isr/Pal integration $12m
3: For UN relief (UNRWA) $77m
4: Food aid $35m
5: Humanitarian aid $33m
6: Special projects $24m
7: Infrastructure $72m
8: Other donations by member states $262m

EU TOTAL: $600m
1: Unused funds from 2003/04 financial year $175m
2: To pay PA debts $20m
3: Spending on new Gaza infrastructure $50m
4: USAID projects $155m

US TOTAL: $400m
Sources: EU, US




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