The United States went along with a compromise plan to send money through the World Bank for services and to pay stipends directly to poor people in the Palestinian territories.

Establishment of the fund is an acknowledgment that an international aid freeze imposed after the election victory of Hamas militants in January has had unintended and harsh consequences for ordinary Palestinians.

The European Union was considering an initial allocation of about $126 million, spokeswoman Emma Udwin said. She said the EU wants to have the funding mechanism in place by early July. The United States is not expected to contribute.

The fund is meant to give a quick cash infusion to the neediest Palestinians while ensuring it stays out of the hands of the Hamas government, which has refused to renounce violence and recognize Israel's right to exist.

The Japan Times Weekly: June 24, 2006
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