It was clear from the outset of the isolating of Hamas policy that it was only a matter of time before the images of increasingly sick and poor Palestinians beamed out to the world from inside the Gaza Strip would melt the nerves of the international community - and a good many people in Israel as well - causing an abrupt shift in the siege of the Palestinian Authority. With the announcement from the Quartet in New York on Tuesday that it is moving to support direct funding of at least health care and probably education as well in the Palestinian territories, the die has now been cast. While Quartet officials say for the time being that the resumed foreign aid will not find its way into the coffers of Hamas, Israel is now in a race to make sure the announcement is not a catalyst for a domino effect that will eventually remove all taboos on funding the terror group-led PA. Already Israel, as announced by Foreign Minister Tzipi Livni, has said it will use some of the tax revenue it has withheld from Hamas to pay for medical "goods and services." Livni went so far as to call the decision by the Quartet "completely acceptable" - no doubt to buy Israel time to figure out a way to stem the bleeding which was an entirely predictable outcome of the "go for broke" policy it instituted vis- -vis the Hamas government upon its ascension to power. In the international arena, it has been proven time and again that the moral high ground cannot compete with Palestinian suffering. Israel now must scramble to form a coherent, long-term and visionary policy on three fronts: the Quartet's position on the Hamas-led PA; its own position on the same regime; and the fast-dwindling prospects of gaining international support for Prime Minister Ehud Olmert's "convergence" plan. As of now, there are many more "unknowns" than discernable facts regarding the funding that the Quartet intends to provide for the PA. Taking itself further out of the game than it already is, the United States bowed to the rest of its peace mediation partners and signed on to an agreement to allow the Europeans to develop a "a temporary international mechanism limited in duration and scope, and fully accountable, that ensures direct delivery of any assistance to the Palestinian people," as the Quartet statement put it. Both European and American officials contacted by The Jerusalem Post stressed the "temporary" and "limited" aspects of the new mechanism. But it would be bordering on delusional to expect that once a life-line is thrown to the Palestinians it will be summarily retracted because of one more suicide bombing or barrage of Kassam rockets. Assuming, then, that the resumed funding is here to stay, Israel must work hard to ensure that it not fall into objectionable hands, nor the black hole of PA President Mahmoud Abbas's own accounts where "transparency" and "accountability" are concepts which echo on the bank vault walls few will ever see. On this there does appear to be more than a glimmer of hope. Contacted by telephone in Brussels, European Commission officials told the Post that, contrary to reports in most other media outlets, the EC is not interested in setting up "parallel structures" within the PA. "We are not interested in something that mirrors what happened within the PA Finance Ministry," EC External Affairs Spokeswoman Emma Udwin said. While the EC does want to use Abbas as an "interlocutor" for humanitarian projects, and needs him as an address to contact since it refuses to do business with Hamas, there is, at least as of now, no intention of funneling money through him, she said. How long it stays that way remains to be seen. When this reporter tried to pin down Udwin, she refused to say that it was "impossible" that money would eventually go through Abbas's office. But the message is clear: If Israel moves quickly, the EU can still be persuaded to use more reputable and transparent means to deliver the funds, such as the World Bank, which has an excellent vetting and accountability system it is capable of putting in place. The other main issue where the new funding is concerned - paying the salaries of PA civil servants - is a more complex matter over which the government can probably exert only indirect influence on the Europeans. By now, everyone has concluded that there is a direct link between non-payment of the 165,000 PA civil servant salaries and the economic ruin and humanitarian deterioration in the territories. More than one report from reputable organizations including the World Bank has concluded that no matter how much food and medicine is sent into Gaza and the West Bank, Palestinians will be living in the dumps until their salaries are reinstated. The difference among the concerned prominent parties - Israel, the US and the EU - is how much each is willing to let Hamas's intransigence devastate the Palestinian people by virtue of the economic siege, and whether, from a strategic point of view, such devastation will bring about the desired results. While the Olmert administration remains steadfastly opposed to paying salaries to any PA civil servants, the Europeans have concluded that such a stranglehold is counterproductive, and peace is better served by paying at least some workers. "Clearly something must be done with basic services like health and education," Udwin said. THE AMERICANS, however, remain unconvinced. In conversations with the Post, US officials say privately that if the Europeans begin paying the salaries of PA civil servants, there remains no other form of pressure on Hamas to reform and accept the three principle demands of Israel and the Quartet: recognition of Israel, renunciation of violence and acceptance of international agreements. The Americans have also said that while the Europeans can develop the mechanism to transfer aid money to the Palestinians, they reserve the right to cancel it. Given the many questions that remain about the operation of the mechanism, not least of which is where the money will go and how it will get there, Israel can perhaps still extract from Europe, via the US, some minimal measure of acceptability on the salary issue before the mechanism's implementation. That minimum level, according to two Israeli officials who spoke to the Post on the matter, seems to be paying health care workers - as long as the money is not funneled through the PA - but not teachers. "Schools are a problem because Hamas schools will teach kids to hate; they will teach Palestinian kids to become suicide bombers," one of the officials said. Fortunately for Israel, development of the funding mechanism will take weeks, not days. And with the statement from Livni that Israel is willing to use the PA tax revenue it is holding to buy medical care for Palestinians, the government has bought itself a window with which it can now formulate a long-term policy in regard to the terrorists-cum-government leaders next door. The problem with the incoming funding from the international community, depending on its scope, is that to a lesser or greater extent, Hamas will now be able to have its cake and eat it too. "It could still maintain its ideology and control the PA, meaning it will still have a veto over the political process," said Eran Shayson, a senior analyst at the Re'ut think-tank in Tel Aviv. "The experts in Brussels are very likely to reach the conclusion that transfer of money should reach other sectors [past health and education] in the PA so it doesn't collapse." But such conditions, though on the surface frustrating, may be exactly what the Olmert administration is looking for. "Israel might find it convenient to stay in its 'crisis position,'" Shayshon said. "Meaning, Israel opposes Hamas, doesn't transfer money, rejects [rhetorically] the transfer of money to the PA, but still doesn't risk a humanitarian crisis. At the same time, it enjoys an address in the PA that is considered to be a stable, non-partner and thus an address for the convergence plan." However, here again, the Olmert administration must move quickly if it is to get the international backing and funding for "convergence" that is a necessity before such a monumental and civilly destructive undertaking is set into motion. IT WAS telling that the Americans, in essence, threw their hands in the air in New York on Tuesday and allowed Europe to usher in the next phase of the Quartet's mission. It was a sudden retreat with broad ramifications - ones that do not end with Europe taking the lead on funding the PA. With Amir Peretz using his newly won pulpit as defense minister in loud support of talking to Abbas, and the Europeans increasingly speaking out against further unilateralism on Israel's part, the politics of "convergence" are growing more problematic by the day. Add to that the price tag it is likely to cost the US and Europe - Israel could not hope to cover the minimum $25 billion by itself - and its shelf life as the main, viable option for Israel going forward appears increasingly in danger of expiration. Olmert's upcoming trip to Washington, therefore, once sold as a mere "getting to know you" jaunt by the newly elected Israeli prime minister, is taking on added weight. If Olmert does not come back from the American capital with a strong wind in his sails for "convergence," the plan may whither on the vines back home before a second round of talks with President George W. Bush - previously assumed to be the time when a grand deal would be struck - can materialize. In this aspect, the two leaders' need for one another could be the biggest advantage they both have. "There is that emotional background and pressure for both of them. They both feel that something must be done urgently," said Hebrew University political science professor Abraham Diskin. "Bush [has it] because of his lack of popularity and the end of his term. And on Olmert's side, there is that belief that whatever you don't achieve very early in your term you might miss."