Hamas unable to pay public workers

New Palestinian government out of money

millions in aid from Arab nations awaited


GAZA CITY, Gaza Strip -- The new Hamas-led Palestinian Authority is out of money and has missed its April 1 monthly payroll for tens of thousands of Palestinian public workers, Prime Minister Ismail Haniyeh said yesterday.

It was Hamas' first admission that it will have difficulty running the West Bank and Gaza without significant help from other countries.

Up to one-third of the Palestinian population is supported by government paychecks, and international organizations including the World Bank have warned that chaos could result if the Palestinian government cannot pay its bureaucrats and security forces.

Under the new Hamas leadership, the Palestinian Authority faces a precipitous drop in international assistance unless it agrees to renounce its stated aim of Israel's destruction. Government paychecks, until recently funded mainly by foreign aid, were to have gone out on the first of the month.

Haniyeh's comments were interpreted as a slap at the Palestinian Authority, which has been riddled by corruption in the past.

"The Ministry of Finance has inherited an entirely empty treasury, in addition to the debts of the ministry and the government in general," Haniyeh told the Cabinet.

Finance Minister Omar Abdel Razek said he is waiting for $80 million from Saudi Arabia, Kuwait and the United Arab Emirates.

"If they pay, and I hope they will, we will be able to pay salaries by the middle of the month," he said.

Because Israel will not allow Hamas ministers to travel between the West Bank and Gaza, the gathering, held simultaneously in Gaza City and the West Bank town of Ramallah, was linked by videoconference.

With financial pressure on Hamas increasing, several senior members of the group have recently made conciliatory statements toward Israel and then backtracked. That pattern was repeated yesterday when new Foreign Minister Mahmoud Zahar said he had not meant to imply, in a letter to United Nations Secretary-General Kofi Annan, that Hamas was willing to accept a two-state solution.

Zahar told the British Broadcasting Corp. that after the letter was drafted by an aide, he ordered that the reference be stricken but that it was included by mistake.

The Cabinet voted to freeze decisions made by the more moderate Fatah-controlled Cabinet just before it left office. One of the decisions was to transfer some powers to Palestinian President Mahmoud Abbas and promote Fatah functionaries, Palestinian officials said.

Haniyeh's Cabinet, sworn into office a week ago, needs to find ways to make up for foreign aid that Western donors are withholding, largely because of the Hamas' refusal to recognize Israel and renounce violence. In the past, Palestinians received about $1 billion a year in foreign aid.

In addition, since shortly after Hamas' January election victory, Israel has frozen the transfer of tens of millions of dollars in tax revenues that it collects on behalf of the Palestinians.

Laura King writes for the Los Angeles Times.

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