Rice Warns Iran About Funding Hamas Leaders

Secretary of State Condoleezza Rice warned Iran and other Middle East powers on Friday not to fund a Palestinian government led by Hamas and questioned whether the militant Islamic group could raise badly needed cash without changing its policies.

In an interview with Arab journalists, Rice delivered a blunt new warning to Iran.

"Iran has its own troubles with the international community and it might want to think twice about enhancing those troubles" by bankrolling Hamas, Rice said.

The United States considers Hamas a terrorist group and Iran a patron of terrorism, and has no official dealings with either.

"I would hope that any state that is considering funding Hamas, a Hamas-led government, would think about the implications of that for the Middle East" and for the goal of peace between Israel and the Palestinians, Rice said.

Rice's trip to Egypt, Saudi Arabia and the United Arab Emirates next week is expected to be dominated by discussion of Hamas' surprise election victory in the Palestinian territories and the separate issue of Iran's disputed nuclear program.

Rice's itinerary excludes Jerusalem and the West Bank headquarters of the Palestinian Authority. Visits there would be awkward due to uncertainty over the makeup of the new Palestinian government and the unsettled political situation in Israel caused by Prime Minister Ariel Sharon's stroke and that country's upcoming elections.

The United States and Israel have ruled out any direct funding for a Hamas-led government, but Rice reiterated Friday that the United States will continue to fund humanitarian projects for the Palestinians.

The Palestinian Authority gets a majority of its approximately $1.9 billion annual budget from overseas sources. Without money from the United States and Europe — or Palestinian customs fees collected by the Israelis — a Hamas-led government would be nearly broke.

Hamas leaders have said they will look elsewhere for money, and are expected to appeal to Arab states and to Iran.

"It will be very interesting to see if that $1.9 billion is available," Rice said with evident skepticism.

The top U.S. diplomat noted that Middle Eastern governments, including Egypt, Jordan, Saudi Arabia and the Persian Gulf states, have signed on to the goal of peace.

She implied that those governments should be pressuring Hamas to renounce violence and accept Israel's right to exist. She noted that Egypt has been sending Hamas the right message.

"Let me put it this way," Rice said. "I think there's only one reason for contact at this point, and that's to make clear what the message is."

Hamas has refused to reconsider its anti-Israel policies since winning its surprise victory last month. The organization has claimed credit for dozens of suicide bombings against Israel, but also has a successful political arm.

The United States is reviewing all aid to the Palestinians following the Hamas victory. Although she again called on Hamas to change, Rice did not sound optimistic about a quick turnaround.

Separately, the State Department said Friday that the Palestinian Authority has agreed to a U.S. request to give back $50 million earmarked for economic renewal projects in the Gaza Strip and West Bank.

Spokesman Sean McCormack said the United States was concerned that the funds might "potentially make their way into the coffers of a future Palestinian government that might not recognize the right of Israel to exist."

He said the vast majority of the funds are still in the bank. The Palestinian Authority is still headed by President Mahmoud Abbas, whose Fatah Party lost to Hamas in legislative elections. A new Palestinian legislature dominated by Hamas will be installed Saturday.

Although protests spawned by publication of cartoon images of the Prophet Muhammad continued Friday, that subject did not come up during the round-table interview with outlets that included the Saudi News Agency, Abu Dhabi TV and Al-Arabiya TV.

Nor was Rice asked about new photos from the prisoner abuse scandal at Iraq's Abu Ghraib prison.

Rice said she has no regrets about supporting Palestinian elections despite the result. She said the same is true elsewhere in the Middle East, where elections may yield governments or policies unfriendly to the United States.

Supporting self-determination, Rice said, "was the only moral thing to do."