Hamas seeks access to Palestinian investment fund

RAMALLAH, West Bank, March 29 (Reuters) - Palestine's new Hamas-led government, facing donor threats of potentially crippling cuts to aid, will try to gain control of a Palestinian investment fund, the finance minister said on Wednesday.

Control of the Palestine Investment Fund (PIF), with an estimated value of $1.3 billion, was transferred from the cabinet to President Mahmoud Abbas's office after Hamas beat Abbas's Fatah movement in a Jan. 25 election, officials said.

"The government seeks to have the Finance Ministry regain control over the Palestine Investment Fund from the president's office," Finance Minister Omar Abdel-Razeq told Reuters.

"We will do this in cooperation with the presidency and not through confrontation."

Abbas's office was not immediately available for comment.

Palestinian officials said money from the PIF could help the new Hamas government. The government is struggling to find ways to finance the cash-strapped Authority following threats from international donors to cut off aid.

Hamas has rejected demands from the West to recognise Israel, renounce violence and accept past peace accords with the Jewish state. Hamas's charter calls for Israel's destruction.

Hamas's government was sworn in on Wednesday, prompting the United States to ban its diplomats and contractors from any contacts with ministries, though they can remain in touch with Abbas's office.

The PIF was set up by then Finance Minster Salam Fayyad in 2004 to consolidate management and control over the commercial assets of the Palestinian Authority, accused of widespread corruption under late leader Yasser Arafat.

The move was praised worldwide as a reform that enhanced transparency and financial accountability.

The PIF runs the commercial operations and investments of the Palestinian Authority abroad. Those include a stake in Cairo-based Orascom Telecom.

Palestinian officials said control of the PIF from the cabinet to Abbas's office on Feb. 4. Before then, the finance minister was the chairman and the cabinet picked the board. Now the president gets to choose board members.

"It is not logical not to have the finance minister as chairman of the board," Abdel-Razek said.

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