Christian Aid recently expressed deep concern about the potentially dropping effect on Palestinian household economies due to Hamas’ victory in last week’s elections.

|TOP|At a meeting in London on Monday, the so-called Quartet Powers – the European Union, US, Russia and the United Nations – said that a new Hamas-led government must recognise Israel and accept current peace agreements and commit to non-violence, or it could lose the financial support it receives from the international community.

In addition, foreign donors warned that the Palestinian Authority could face aid cuts and plunge the population further into crisis.

The Israeli government agreed that the new administration should affirm to these demands, and has suspended the payment of taxes and custom duties owed to the Palestinian Authority (PA).

Amounting to US$55 million per month, the tax revenue payments may be resumed when a ‘policy review’ has been completed. This is a vital source of Palestinian income and essential if the PA is to move towards a sustainable budget.

|AD|The Security Council noted that major donors will conduct such a review and said it was “cognisant of the humanitarian needs of the Palestinian people” and reaffirmed “its continuing interest in the fiscal stability of the caretaker government, consistent with clear reform and austerity benchmarks.”

In 2005, the EU gave around £338 million in aid to the PA, which funded education and health services.

UN Secretary-General Kofi Annan said on Monday that aid would not stop immediately. US and European officials said it will probably take two to three months for a new Hamas government to form and take office, effectively giving Hamas a brief grace period to accede to international demands.

The main cause of the Palestinian poverty is Israel’s occupation of the Palestinian territories. While aid is a necessary lifeline for the Palestinians, it can only address the symptoms of the occupation rather than bring about a lasting solution to poverty. Palestinian dependency on emergency relief will grow as poverty deepens.