Hamas says in principle no problem with World Bank account

"In principle we don't have a problem with that," finance minister Omar Abdelrazek told AFP as French President Jacques Chirac made the expected announcement in Paris, flanked by Palestinian Authority president Mahmud Abbas.

"But we have to talk about the details and preserve the rights of the ministry of finance to control and oversee all the financial procedures," Abdelrazeq added.

"It could be a solution as long as it preserves the integrity of the Palestinian financial system," the minister added.

According to Chirac's proposal, a special account at the World Bank would be created to send payments directly to 160,000 Palestinian civil servants, thus bypassing the Hamas-led government, which is boycotted by the West.

Government spokesman Ghazi Hamad warned, however, that salary payments "should be coordinated with the government", expressing reluctance to see what he called "the creation of a second government".

He accused "some countries" of trying to prevent the administration from paying salaries, accusing these nameless states of going "behind the back" of the cabinet.

Meanwhile, Hamas prime minister Ismail Haniya, preaching at a Gaza City mosque, said he hoped that financial bequests secured by members of his cabinet from Muslim countries would be enough to pay salaries for March and April.

"Our ministers who went abroad received promises of aid for the Palestinian Authority. God willing, this money will be enough for last month's salaries and I hope it will be enough for next month (April)," he said.

"Now we are discussing how we can get this money into the territories."

Last Sunday, foreign minister Mahmud al-Zahar said the Palestinian Authority had received 50 million dollars in aid with another 40 million on the way -- still far short of the monthly salary cheque of around 118 million dollars.

Abdelrazaq again warned efforts to starve the Palestinian Authority of funds in order to erode Hamas' popular support would backfire against the West.

"The Palestinians know who is behind the crisis. They know that Israel and the United States are behind the crisis. We believe the anger will be directed against Israel instead of the Palestinian government," he said.

The administration has been unable to pay any salaries since March, which given the heavy burden of "state" machinery in the Palestinian territories affects the livelihoods of one million people or a quarter of the population.

A long-standing financial crisis in the Palestinian Authority has hit disaster level since Hamas took office last month, with Israel withholding customs duties and the European Union and United States suspending direct aid.

Abdelrazeq reiterated calls for a boycott of British, Israeli and US products in protest at economic sanctions, which have provoked concerns of increased unrest in the Palestinian territories that could destabilise the government.

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