Israel 'frees funds to boost Abbas'

The vote came a day ahead of Olmert’s meeting in Egypt Monday with Abbas, President Hosni Mubarak of Egypt and King Abdullah of Jordan.

The summit is designed as a high-profile display of support for the Palestinian president against his Hamas rivals, who seized control of the Gaza Strip in a brutal rout of Abbas’ Fatah movement earlier this month.

The infighting has left the Palestinians with two governments – Abbas’ new government in the West Bank, and the Hamas rulers in Gaza.

The main proposal at today’s Cabinet meeting was the release of some 550 million dollars (£220m) tax money that Israel has withheld from the Palestinians since Hamas swept Palestinian parliamentary elections in January 2006.

Israel considers Hamas a terrorist group. But after Abbas expelled the Islamic group from the Palestinian government, Olmert signalled he would unfreeze the money.

Olmert’s spokeswoman, Miri Eisin, said the vote was a “decision in principle” to release the funds.

“The exact amount, will be decided in discussion with the Palestinian president in (Egypt) and afterward with the government,” she said.

Meeting participants said the proposal passed with an overwhelming majority; just two-hard-line ministers voted against it.

The money – mostly customs duties that Israel collects on behalf of the Palestinians – has been withheld in an unsuccessful bid to pressure Hamas to recognise Israel’s right to exist and renounce violence. Without the funds , the Palestinian government has been unable to pay the salaries of its workers.

The Cabinet also discussed the removal of some of the hundreds of roadblocks Israel has erected throughout the West Bank, meeting participants said. The travel restrictions have been put in place on security grounds, though the Palestinians say they are excessive and punitive.

Similar gestures have been weighed in the past, and then, as now, Israel will demand in return that Abbas confront militants – something he had been reluctant to do before Hamas rolled over Fatah security forces and wrested power in Gaza.

Since then, Abbas has acted with unprecedented force: He expelled Hamas from its coalition government with his Fatah movement, set up an emergency Cabinet, and embarked on a widening crackdown on the Islamic group that has included arrests of hundreds of gunmen in the West Bank and a plan to dry up its funding.

Olmert told the Cabinet that while Israel wants to boost Abbas, he also would lay out Israel’s expectations at tomorrow’s summit in the Egyptian resort of Sharm el-Sheikh.

“We shall present there our expectations from the opposite side, our demands on the issues of security and the war against terror, but definitely also our readiness to cooperate with the new government,” he said.

Olmert said Israel will continue to ensure that humanitarian aid reaches the Hamas-controlled Gaza Strip. “We shall, of course ... make sure we supply all the services: electricity, water, medical services and food,” he said.

Olmert has expressed optimism that the main stumbling block to renewed peace talks with the Palestinians has been removed with Hamas’ ouster from the Palestinian government. The prospect for re-energising long-stalled peace talks is expected to be a major item at the regional summit.

An Israeli pullout from the West Bank – a prerequisite for Palestinian statehood – is unlikely, however, unless Abbas can ensure the evacuated territory won’t be taken over by militants and used to launch attacks on Israel. Abbas’ failure to do that in Gaza could make Israelis less inclined to risk a West Bank withdrawal.