WASHINGTON -- The Bush administration is poised to lift its economic and diplomatic embargo against a new Palestinian government in the West Bank since it no longer includes the Islamic militant group Hamas.
Secretary of State Condoleezza Rice is expected to announce the new U.S. policy early this week, a senior U.S. official said Sunday. That announcement will coincide with a visit by Israeli Prime Minister Ehud Olmert, who is holding talks in Washington beginning Monday.
The White House declined to comment on Sunday, but Jacob Walles, the U.S. consul-general in Jerusalem, said Saturday that the international aid embargo imposed after Hamas won parliamentary elections last year will no longer apply to Palestinian President Mahmoud Abbas' government, and that he expected it to be lifted this week.
The senior U.S. official, who spoke on condition of anonymity to describe internal discussions, said that any U.S. gestures toward Abbas will be made independently of Israel.
The move essentially would reset U.S. policy to the days before Hamas swept legislative elections in early 2006 and upended U.S. and international peacemaking. The United States, Israel and the European Union regard Hamas as a terrorist organization.
Since those elections, Hamas has continued to flex its muscles.
Meanwhile, in a major boost to Abbas, European Union foreign policy chief Javier Solana announced in Luxembourg on Monday that the 27-nation bloc would resume direct financial aid to the Palestinian Authority now that Hamas is no longer part of the government.
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"We absolutely have to back" the new government in the West Bank, said Luxembourg Foreign Minister Jean Asselborn. "The question of today is: How can we help the 1.4 million people in Gaza?"
Hamas' violent takeover of the Gaza Strip last week split the Palestinian government in two: the Hamas leadership headed by deposed Prime Minister Ismail Haniyeh in Gaza and the new Cabinet now led by the Western-backed economist Salam Fayyad in the West Bank.
Hamas, which does not recognize Israel's right to exist, now runs Gaza, home to an estimated 1.5 million Palestinians. Abbas and his secular Fatah Party now run the West Bank. The West Bank, although much larger, also is home to estimated 1.5 million Palestinians.
The split cleared the way for the U.S. to resume direct aid payments to the Palestinian government, something it has refused to do so long as Hamas was a part of the government and could benefit from U.S. dollars.
Some in the United States and in Europe have advocated a policy dubbed "West Bank first" in which the West Bank would stand as an example of what a future Palestinian state could be. Critics on the other side say that leaves Palestinians living in the Gaza Strip without assistance. Europeans oppose this idea, and still others worry it would leave the Gaza Strip open to funding and influence from Iran and Syria.
After losing Gaza in a swift, five-day Hamas assault on his forces, Abbas moved quickly to cement his rule in the West Bank. He replaced the prime minister, Ismail Haniyeh of Hamas, with Fayyad, a U.S.-educated, internationally respected economist.
Fayyad then moved forward with plans to form an emergency government - a move that Hamas has deemed illegal. The new government was sworn in by Sunday.
"I think Fayyad, the newly named prime minister, is a serious, serious person with real capability," Sen. Joseph Biden, D-Del., said on ABC's "This Week." "I think we should be supporting him. I'm confident the Israelis are going to do that, but it's a very difficult situation."
Five years ago, President Bush called for a separate, independent Palestine alongside Israel. He was the first U.S. president to back that notion so fully and publicly. But his administration has taken heavy criticism for letting the peace process drift while conditions worsened for the impoverished Palestinians.
The Bush administration has quickly pressed Israel to ease its freeze on tax revenues it collects monthly on behalf of the Palestinian Authority. It is not clear whether Israel will make that move now, but the tax receipts are expected to be discussed during Olmert's visit with Rice and Bush's national security adviser Stephen Hadley on Monday and with the president on Tuesday.
In New York on Sunday, Olmert said his country would be a "genuine partner" of a new Palestinian government and promised to consider releasing the hundreds of millions of dollars in frozen tax funds.