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President Bush signed into law a bill meant to block US aid to the Hamas-led Palestinian government and ban contacts with Hamas until the militant faction has renounced violence and recognized Israel's existence.
It also creates a $20 million fund to promote democracy, human rights, freedom of the press and peace between Israel and the Palestinians.
The Bush administration stopped aid shortly after the January election victory by Hamas, which Washington considers an international terror organization. The bill Bush signed puts into law what already was administration policy.
Republican Sen. Mitch McConnell, R-Ky., sponsor of the Senate bill with Sen. Joe Biden, D-Del., said the legislation makes clear the Palestinian Authority can expect no US help so long as it continues to be led by Hamas.
"The Palestinian people are ill-served by a Hamas-led government that refuses to work toward the betterment of its citizens by failing to renounce terror and work toward peace with Israel," McConnell said.
Rep. Ileana Ros-Lehtinen, R-Fla., ranking member on the House International Relations Committee after Congress reconvenes Jan. 4, said she was pleased the president signed the bill she sponsored in the House.
"By fixing his hand to this legislation today, President Bush has indicated that the US will not, directly or indirectly, allow American taxpayer funds to be used to perpetuate the leadership of an Islamist jihadist entity like Hamas," she said.
The White House said the legislation Bush signed reflects the administration's concern over the current government's failure to renounce violence and terror, recognize Israel and respect previous agreements and obligations. Exceptions are made to provide financial support for Palestinian President Mahmoud Abbas, who has committed to a negotiated two-state solution with Israel.
Despite the ban on official aid, the United States has provided $468 million in humanitarian aid, delivered by non-governmental organizations and in other ways that bypass the Hamas government.