Aid embargo remains against Palestinians

WASHINGTON, March 19 (Reuters) - World powers will continue an aid embargo against the Palestinian government but European officials said on Monday they were optimistic the new authority would ultimately meet conditions needed for it to be scrapped.

The United Nations, the European Union, Russia and the United States -- the so-called quartet members -- have demanded the Hamas-led government recognize Israel, renounce violence and agree to Israeli-Palestinian accords before the embargo is lifted.

But the new Palestinian government, which was sworn in last weekend and brings together Islamic Hamas and the more moderate Fatah party of President Mahmoud Abbas, had not yet met those conditions, said Javier Solana, the EU's foreign policy chief.

"We expect very much that this government ... will be taking the positions of the quartet as much as possible and in the end completely," he told a news conference with U.S. Secretary of State Condoleezza Rice and other European ministers."

The EU's External Relations Commissioner Benita Ferrero-Waldner said some members of the new Palestinian government had already indicated they would support quartet principles and she hoped they would have some influence.

"This presents an opportunity and we have to think carefully how to respond to it," she told Reuters.

"We will have to judge the new government by its actions and its words and I do hope that the momentum towards fulfillment of the three quartet principles will indeed be maintained," she said.

Quartet ministers spoke by telephone on Monday and State Department spokesman Sean McCormack said there was no change in the aid embargo unless the new government met quartet demands. A quartet statement will likely be released on Tuesday.

Ferrero-Waldner said a mechanism to get money to the Palestinians while bypassing the government would be extended for three months while the quartet made a judgment on the new government.

"It is very important that, in this delicate moment, we at least can go on with our temporary international mechanism," she said.

She said other quartet members were also interested in her idea of finding a more permanent mechanism to help build institutions in the Palestinian territories.

"We are looking at what could be done as if a Palestinian state comes about we have to have institutions that function according to good governance," said Ferrero-Waldner.

The United States, while pushing for the embargo to stay in place, has softened its stand on having contacts with the new Palestinian government and the McCormack said Washington could deal with some non-Hamas members in the government on a case-by-case basis.

Rice, who will visit the Palestinian territories and Israel in the coming days, said she wanted clarity from Hamas Prime Minister Ismail Haniyeh over what he meant when he said the Palestinian people had a "right to resistance," a phrase in the new government's platform that has rankled Israel and others.

"I am not going to try to interpret what the right of resistance means, but I'll tell you, it doesn't sound very good to me," Rice told the news conference.

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