CAIRO: The Palestinian Authority will boycott banks that balk at transferring money to its government because Hamas is in charge, Palestinian Foreign Minister Mahmoud Zahar said. Speaking after meeting Arab League officials in Cairo on Thursday, Zahar said a delegation from the Palestinian Finance Ministry was discussing with League officials suggestions and alternatives for transferring funds to the Authority. The government has come under heavy pressure since Western powers such as the United States and European Union stopped direct funding to the Authority because Hamas refuses to recognize Israel and renounce violence. The cut-off caused widespread hardship in the Palestinian territories where the government is the largest employer. Salaries for March and April have not been paid. Banks have delayed fund transfers to the Hamas-led government for fear of U.S. sanctions. The United States lists Hamas as a terrorist organization and takes steps against those who transfer money to such bodies. Zahar said the government will not deal with banks that refuse to ensure the money transfers. In Lebanon, Hamas representative Osama Hamdan said the militant group had found a way to circumvent Western efforts to block donations to the Palestinian government, but he did not say how this could be done. Hamdan said some money had already arrived in the West Bank and Gaza. Perhaps we will break this siege soon, God willing, Hamdan said in an interview with Al-Manar television, a channel run by the Lebanese militant group Hezbollah. The money is there. It s the American administration that is throwing obstacles, he added. Zahar, meanwhile, took pains to stress that the government would handle transfers in a transparent way. The transfer of money to the Palestinian people will take place in a clear and legitimate way to every citizen. There will be no secret ways, Zahar said. One of the options that the Arab League is considering is to transfer money to a fund set up by the World Bank for aid to the Palestinians. But Hamdan rejected this option in his interview with Al-Manar, saying it was an attempt to dismantle the Authority. There is an existing political system and to seek to tear it apart is illogical, Hamdan said. Hamdan said Arab states and Iran have pledged $347 million, but called it regretful that some Arab banks have not yet transferred the funds as a result of American pressure. There was $90 million for the Palestinians that was being delayed in Jordanian banks, Hamdan said. He said the aim of U.S. pressure was to undermine the Hamas government and replace it with one loyal to Washington. The U.S. is telling the Palestinians: Either you are governed by agents linked to the American administration and you receive money or you will suffer if you want to be ruled by honest people , he said. Separately Thursday, Arab League official Hussein Hamouda said his organization was preparing to send LE 1.5 million (about $260,400) worth of medicine to the Palestinian Health Ministry. Hamouda said Palestinian officials had requested medicine for diabetes, blood pressure and asthma after they ran out of strategic stocks. It was not clear when the League contribution would be delivered. On the political front, Zahar said the Palestinian cabinet was studying a 2002 Arab League peace plan that calls for full recognition of Israel in exchange for a return to pre-1967 war borders. We promised the secretary-general of the Arab League that we will study it inside and out and give our final say as soon as possible, Zahar said. Israel has rejected the plan because it calls for a total withdrawal from the West Bank, Gaza and east Jerusalem. This territory was captured in the 1967 Arab-Israeli war. The plan also proposes the creation of a Palestinian state alongside Israel. AP
