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Israeli Prime Minister Ehud Olmert denied in an interview published Friday that Palestinians were experiencing a "humanitarian crisis" and said Israel would buy them any medicine they need.

"We wouldn't allow one baby to suffer one night because of a lack of dialysis," Olmert said in an interview with The New York Times.

Claims that the Palestinians face "humanitarian crisis" are "for the time being total propaganda," the Israeli leader said.

The Hamas-led government has been unable to pay salaries of its 165,000 employees — about one-third of Palestinian households — for two months because of international sanctions, including Israel's refusal to transfer $55 million in monthly tax revenues.

The crisis has reportedly put the cash-strapped Palestinian Authority on the verge of complete economic collapse.

Despite is financial straits, Hamas has stubbornly rejected international demands that it recognize Israel, accept past Israeli-Palestinian peace agreements and renounce violence.

The United States and the European Union, which list Hamas as a terrorist organization, are looking for ways to circumvent the Islamic group and get humanitarian assistance to the Palestinians.

Olmert said that any medicines purchased by Israel would be given directly to hospitals, bypassing Hamas, which is sworn to Israel's destruction.

"We will pay, if necessary, out of our own pockets," Olmert said.

Olmert's comments came days before he heads to Washington for his first meeting as prime minister with President Bush.

At the White House meeting on May 23, Olmert is expected to present his plan to withdraw from most of the West Bank and draw Israel's final borders, unilaterally if necessary.

But in the newspaper interview, Olmert remained vague about the details of the plan, which would annex the three largest West Bank settlement blocs for Israel.

"What I can talk about at this point is the basic desire to set borders for Israel, to separate from the Palestinians and to create a contiguous territory that will allow the Palestinians to fulfill their national dreams and establish their own independent state alongside the state of Israel," Olmert said.

"We have to set borders and to define strict lines of what is right and what is wrong. It's not just a political issue, it's a social issue, it's a cultural issue," he said.

The plan, Olmert said, would be closely coordinated with the United States, the United Nations, the European Union and Russia — the four members of the so-called Quartet of Mideast mediators.

In the interview, Olmert appeared to leave the door open for possible talks with Palestinian President Mahmoud Abbas, leader of the Fatah Party that Hamas ousted in January parliamentary elections.

Olmert has said he will not hold peace talks with Abbas while Hamas remains in power, saying the Palestinian leader does not have the ability to implement any agreements.

Abbas, however, still wields significant authority despite his party's election loss, and the United States remains in favor of Israel holding peace talks with the president.

Olmert said Abbas must disarm Hamas and other "terrorist organizations," saying such a scenario would not necessarily lead to civil war.

Since Hamas' election victory, Fatah and Hamas have come increasingly close to a civil confrontation. They each sent their armed forces to Gaza streets in recent days, finally leading to a gunfight overnight Friday.

"I have to say, how can any political entity tolerate the existence of many armed groups fighting against each other in the streets?" Olmert said.

Abbas "has to force Hamas to change, has to impose on Hamas the acceptance of Israel and the recognition of all agreements signed with Israel and the disarming of its militant groups, because if not, then the damage threatening the Palestinian Authority is devastating," he said.