Pleased with the performance of Prime Minister Mahmoud Abbas (search), the Bush administration is considering a resumption of direct aid to the Palestinian Authority - with a big boost to help strengthen its security forces.

For years, the United States has bypassed Yasser Arafat (search) and the Authority and assisted Palestinians directly through the United Nations and private groups.

This year, the Palestinians are due to receive $200 million in U.S. funds on top of more than $1 billion which the European Union and the Arab League provide directly to Arafat and the Authority.

Secretary of State Colin Powell (search) has showered praise on Abbas, calling him the kind of leader the Palestinian people should embrace. President Bush's national security adviser, Condoleezza Rice, went to the West Bank last week to invite Abbas to meet with the president again.

No date has been set for a meeting, but the administration's admiration for Abbas, and its bypassing of Arafat, reached new heights with the promise of four Palestinian terror groups to suspend attacks on Israelis for three to six months.

The decision to circumvent Arafat in providing aid was based on a slowly developed judgment that he is an inadequate leader and that U.S. assistance was being diverted.

A decision to resume directly aiding the Palestinian Authority (search) is under consideration, along with a sizable contribution to help Abbas rebuild the Palestinians" tattered security forces.

"We've made no decision about what level of potential increase in funds there would be," White House spokesman Ari Fleischer said Tuesday. "But the very fact we are involved in these discussions directly with the Palestinian Authority is a hopeful sign."

Fleischer said Congress also recognized that "the circumstances have changed in the Palestinian Authority."

The Israeli decision, prompted by the Bush administration, to withdraw troops from Gaza - and possibly from West Bank towns and cities - could be costly.

A senior administration official said Tuesday, however, that "we have made clear we will help the Palestinians rebuild their security service. We will have to decide how best to do that."