Israel agrees to release $95m to Palestinians

JERUSALEM - Israel has declared that it will release up to US$60m ($95m) in duties owed to the Palestinians to boost the funding mechanism being drawn up in an effort to stem a mounting humanitarian crisis in Gaza and the West Bank.

In a separate development, a group of imprisoned Hamas members joined with ones in Fatah in backing the goal of a Palestinian state on the borders with Israel which existed before the Six Day war in 1967.

The move appeared to be a significant modification by the Hamas prisoners of their long held stance in favour of eliminating Israel.

The Israeli move on humanitarian aid was signalled in a television interview by Tzipi Livni, the Israeli foreign minister, which initially took officials by surprise.

Ms Livni said the funds which Israel had been withholding since the formation of the new Hamas government could be released provided they were used for humanitarian purposes and not for salaries of over 150,000 employees.

It follows a partial climbdown by the US administration which relented on its all out opposition at this week's meeting of the International to a trust fund which Europeans hope will avert the total collapse of essential Palestinian services like health and education.

One Western diplomat suggested that Israel had been facing growing embarrassment over its retention of the funds in the face of growing hardship among Palestinians.

But Israeli officials said Ms Livni's move would also give Israel a bigger say in formulating the kind of mechanism the Europeans are devising.

Meanwhile Mahmoud Abbas, the Palestinian president, warmly welcomed as "very important" the joint Fatah-Hamas statement The draft was negotiated in Israel's Hadarim Prison, where the Fatah leader Marwan Barghouti and Abdel Khaleq Natche of Hamas, the two leading signatories of are serving sentences.

The statement proposes authorising Mr Abbas to negotiate a state "in all the lands occupied in 1967".

It does not renounce all violence but suggests the factions would "focus their resistance on the lands occupied in 1967."

Mushir Al Masri, a prominent Hamas figure in Gaza said the document "could be a good base for a national platform and a national dialogue, but it still needs more discussion."

Meanwhile Mr Abbas appeared to have negotiated a deal with the Israeli company Dor Energy to end a cut-off of Palestinian fuel supplies because of unpaid bills.

- INDEPENDENT