International sponsors of a stalled Mideast peace plan agreed Saturday to channel aid to cash-starved Palestinians for health care, utilities and social services, while continuing a boycott of the militant-led Palestinian government.

The United States went along with a compromise plan to send mostly European money through the World Bank for services and to pay stipends directly to poor people in the Palestinian territories.

Establishment of the fund is an acknowledgment that an international aid freeze imposed after the surprise election victory of Hamas militants in January has had unintended and harsh consequences for ordinary Palestinians.

The United States, United Nations, European Union and Russia issued a brief statement endorsing a plan drawn up last week by the EU. The four are the sponsors of a peace plan called the roadmap, which sets conditions for an independent Palestinian state in the territories bordering Israel.

The four called the fund temporary and limited, and said they will reassess the need for it in three months. The group also appealed to other nations, including Israel, and international groups to use the fund.

The fund is meant to give a quick cash infusion to the neediest Palestinians while ensuring it stays out of the hands of the Hamas government. Hamas has refused to renounce violence and recognize Israel's right to exist, and much of the world refuses to help the new government until it meets those conditions.

Hamas has taken responsibility for dozens of attacks on Israel and recently lifted a moratorium on new attacks. The United States, Israel and the European Union consider Hamas a terrorist group.

The group had announced plans for the aid fund in early May, as a humanitarian crisis was building in the West Bank and Gaza. The Palestinian government relies on international aid for more than half its annual budget, including the salaries of more than 160,000 civil servants who have not been paid in months. Some have stormed government buildings in protest.

As conditions in the territories worsened, a split emerged among donors over how to help. Israel and the United States led a hard line, while the European Union and Russia said the world must keep the Palestinian economy afloat to avoid a humanitarian crisis.

In accepting the fund, the United States softened its position. Critics have warned that increased aid payments, even if they bypass the Hamas government, will eventually ease economic pressure on Hamas.

The Islamic militant group had criticized the plan Friday, saying the Europeans bowed to American pressure to follow a "hostile policy" aimed at dividing the Palestinians.

"This is regrettable," Hamas Information Minister Youssef Rizka said.

The EU was considering an initial allocation of about $126 million, spokeswoman Emma Udwin said. She said the EU wants to have the funding mechanism in place by early July. The United States is not expected to contribute.

The United States and Europe have haggled for weeks over terms of the fund, which some European diplomats said should cover salaries for essential workers in health care, education and other fields. The Bush administration opposed paying any salaries, but agreed in recent days to allow stipends based on needs, even if some recipients might be government employees.