U.S. Pledges $500 Million Aid for Abbas-Led Palestinian Government

WASHINGTON – The United States will pledge about $500 million for the moderate-led Palestinian government in the West Bank when Arab, European and other nations meet next week, U.S. officials said.

The money would go toward a goal of $5.6 billion that former British Prime Minister Tony Blair hopes to raise to rescue the tattered Palestinian economy and reinforce institutions that would become the backbone of any eventual independent Palestinian state.

Secretary of State Condoleezza Rice will deliver the pledge at a conference Blair has called Monday in Paris, the officials said. The officials spoke Friday on condition of anonymity because the figure has not been announced and might be changed slightly.

The money is part of world efforts to improve the Palestinians' financial position as new U.S.-sponsored peace talks begin.

Rice cannot promise that she can deliver on the pledge, which must be approved by the U.S. Congress. The money includes about $400 million that the White House has already announced, but that has not been approved by Congress.

Some members of Congress are worried that money spent to strengthen the West Bank eventually could benefit a rival radical-led government in the other, separate, Palestinian territory of the Gaza Strip. Other legislators want greater assurance that the West Bank government has shed its long reputation for corruption and cronyism.

Rice will meet Sunday with Palestinian prime Minister Salam Fayyad to discuss the pledge. Fayyad is a banker whose clean reputation and efforts to reform the government are often praised by the Bush administration.

Fayyad is expected to raise Palestinian frustration that he has been unable to win assurances from Israel that it will ease stifling restrictions on Palestinian movement.

The World Bank has warned that unless Israel removes some of the physical and administrative obstacles to Palestinian travel and trade, donor countries may be wasting their money.

Even if the donors pay the full amount, the Palestinian economy would keep shrinking by about 2 percent a year as long as the Israeli restrictions remain in place, the World Bank wrote in a report issued Thursday.

Israel's military has been reluctant to remove some of the hundreds of roadblocks and barriers in the West Bank, saying they're an effective tool against Palestinian militants, and the Palestinian government does not have sufficient control over the territory to prevent attacks on Israelis.

The United States provides more than $2 billion a year in aid to Israel, its closest Middle East ally and single largest recipient of U.S. foreign aid. Egypt, the first Arab state to make peace with Israel, receives about $1.3 billion. Both nations would receive more money over the coming decade under a package announced this year.

By comparison, the United States provides very little to the Palestinians, whose economy and government are dependent on foreign donations. The $400 million requested this year marked a departure for the administration, which had contributed roughly $250 million in recent years.

The administration intended the $400 million to be spent in 2008.

The election victory of Hamas radicals nearly two years ago has complicated U.S. interaction with the Palestinians and hopes for peace in a separate and sovereign Palestinian state in Gaza and the West Bank. The United States and Israel regard Hamas as a terror group and refuse to deal with it. That meant the United States scaled back previous aid plans for fear of inadvertently giving money to Hamas.

Hamas' defeat of forces loyal to the moderate Fatah Party in Gaza in June clarified the aid picture. The administration says its direct aid money can now bypass Hamas by going only to the U.S.-backed West Bank government. The United States also is spending a small amount for humanitarian relief in Gaza.

France is hosting the donor conference as a follow up to the international peace conference last month in Annapolis, Maryland.