Quartet deal on Palestinian aid close, say U.S., EU

"The European Council has endorsed our proposal for a temporary international mechanism," European Commission spokeswoman Emma Udwin told a news briefing of an agreement by the bloc's 25 member states at a summit in Brussels.

She said the EU was now "very, very close" to getting the endorsement of the so-called Quartet of international Middle East peace brokers -- the United States, Russia, the United Nations and the European Union.

In Washington, U.S. Secretary of State Condoleezza Rice said the United States was still working on some elements of the plan but she believed a solution was in sight.

"I think we are close to substantial agreement on it," Rice told a news conference after meeting Italy's Foreign Minister Massimo D'Alema where the two discussed the issue.

"It is important to have a way for donors to address the needs of the Palestinian people without contributing to the Hamas government," added Rice.

D'Alema said it was essential that the aid mechanism was in place to prevent a "terrible humanitarian crisis" from afflicting the Palestinians.

The plan covers essential supplies to the health sector and payments to health care services providers, utilities including fuel, and cash allowances to cover the basic needs of the poorest sections of the population.

Both the EU and the United States suspended aid to the Palestinian Authority when Islamic militant group Hamas refused to recognize Israel and failed to renounce violence but they recognized last month an emergency scheme was needed to prevent the Palestinian territories sliding into chaos.

DIFFERENCES

The U.S. envoy for the Quartet, senior State Department official David Welch, joined his Quartet counterparts via telephone to discuss the plan on Friday and find solutions to outstanding differences.

There have been signs that the Europeans were at odds with Israel and the United States, which have opposed payments of salaries. The EU has suggested allowances that would be exceptional, non-contractual payments.

Diplomats said the EU would not have approved anything likely to be blocked by other members of the Quartet.

The commission spokeswoman said the aim was to get assistance flowing by early July.

Aid will be channeled under a three-part structure, an EU statement said. Udwin said the EU's executive had proposed providing 100 million euros ($126 million) for the mechanism, but she could not give a figure for its overall cost.

The World Bank's existing Emergency Services Support Programme will be expanded to cover essential supplies and allowances to the health sector, while the EU's Interim Emergency Relief Contribution will be beefed up to ensure uninterrupted supplies of utilities such as fuel.

The statement added that Palestinian President Mahmoud Abbas's office would act as an interface with donors, signing and authorizing necessary documents.

(Additional reporting by Sue Pleming in Washington)

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