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Last Updated: Monday, 20 March 2006, 18:58 GMT
Europe hands over Palestinian aid
Palestinians with bags of food aid in the Gaza Strip
Thousands of Palestinians depend on food aid
The European Union has handed over 64m euros (44m) in aid to help the poorest Palestinians in Gaza and the West Bank.

But it said that future aid depended on the incoming Hamas government showing a commitment to work for peace, saying the group was "at a crossroads".

The EU is due to give another 60m euros to cover official salaries and energy expenses for the Palestinian Authority.

The one-off aid package was agreed last month after Israel withheld monthly customs revenues from the PA.

The money will be distributed via the United Nations.

The EU was the largest single donor to the Palestinians in 2005.

'No blackmail'

In Brussels on Monday, EU external relations commissioner Benita Ferrero-Waldner handed a cheque for 64m euros to Karen AbuZayed, of the UN Relief and Works Agency (UNRWA).

She was insistent that Hamas, which has refused to recognise Israel or renounce violence, needs to fall into line with the international community.

PALESTINIAN ECONOMY
Rafah crossing
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
Hamas has been responsible for dozens of suicide bombings against Israel, and is branded a terrorist organisation by the EU and the US.

"We leave the door open for positive change but at the same time we also have to make clear we cannot go soft on our principles," Ms Ferrero-Waldner said in Brussels.

A Hamas spokesman, Salah Bardawil, said the group recognised that the PA faced economic difficulties.

"But we will not go begging to the United States and Europe because we will not be blackmailed over our political positions," he said.

He said Hamas, an Islamic organisation, would seek new funding from the Islamic world.

The aid was handed over as Israel allowed a limited re-opening of the Karni crossing into the Gaza Strip, which had been closed to incoming goods for days.

Palestinian officials had warned of an impending humanitarian crisis if the crossing stayed shut.

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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