While Israel is vigorously lobbying the international community to isolate a Hamas-run Palestinian Authority unless certain conditions are met, PA Chairman Mahmoud Abbas is similarly trying to convince it to financially support a caretaker government until after the Israeli elections.
According to Western diplomatic officials, Abbas, in recent talks with the Quartet principals (the US, EU, Russia and the UN) asked for support for a transitional government so the PA could put its financial house in order, get out of the shadow of the Israeli elections and give Hamas time to contemplate the fact that it now has to govern.
He seems to have been successful, as both the Quartet and EU foreign ministers indicated after separate meetings Monday that financial assistance to the PA would not be terminated yet, and would depend, as the Quartet statement said, on the future PA government committing itself to "principles of non-violence, recognition of Israel and acceptance of previous agreements and obligations, including the road map."
According to one Western diplomatic source, the State Department, the EU and the office of Quartet envoy James Wolfensohn are "looking for modalities for keeping the interim Palestinian government solvent."
This issue, one official said, was being treated as a "standalone issue," independent of the larger issue of how to react toward the PA if Hamas joins the government without accepting Israel's three cardinal demands: disavowing terrorism and disarming, recognizing its right to exist and accepting previously signed agreements.
One possible temporary solution to the PA's immediate fiscal problems - as of Friday it will not have sufficient funds to pay the salaries of its approximately 135,000 employees - is the Saudi government's pledge of some $100 million to the PA in late December, a sum it has not yet paid. Diplomatic officials said the US is pressuring the Saudis to make good on this promise.
Officials said that now that the international community has indicated that it would not immediately cut off aid, Israel will come under increased pressure to release some $60 million in customs and tax revenue that it is scheduled to transfer to the PA on Friday.
Senior government officials in Jerusalem have said that this money would not be transferred on time, but that another meeting on the matter was expected next week.
Western diplomats have said it was unfortunate that this issue has turned into a political issue in Israel, and that Acting Prime Minister Ehud Olmert has shackled himself by making an issue out of the transfer, since if he were to now release the money he would come under a barrage of criticism from the Likud.
A three-month PA transitional government, one Western official said, would remove political considerations from the crucial decisions that Israel needed to make regarding the new reality in the PA.
Meanwhile, EU Ambassador Ramiro Cibrian-Uzal said at a Jerusalem press briefing Tuesday that while the EU remained optimistic that Hamas would adopt policies that advance the peace process, it could not wait forever.
"In the next several weeks or the next several months, a new government will be set up," he said. "By the time a new government is set, we will need to establish new policy."
Cibrian-Uzal said the PA received approximately 90 percent of its funding from the international community. In addition, he said the some $42.5 million the EU refused to transfer to the PA in November because it did not live up to budgetary benchmarks would remain frozen.
"I believe that the international community pretty much has a harmonized view of how to react to this new situation," he said. "We have all agreed to the conditions that Hamas must meet if we are to open a new chapter in our relations with the Palestinian Authority."
He outlined those conditions as Hamas agreeing to a nonviolence pact, which includes disarming the militias, recognizing Israel and endorsing agreements that the PA had committed to in the past.
In the meantime, he said, there was no contact - official or otherwise - between the EU and Hamas. "We are under strict instructions not to meet with them," he said.
Foreign Minister Tzipi Livni, meanwhile, will take Israel's case against Hamas to Egypt Wednesday, on her first trip abroad since taking office two weeks ago.
Her message to the Egyptians will be similar to Israel's message regarding Hamas to the rest of the world, but the feeling in diplomatic circles is that Egypt has a degree of sway over Hamas that others may not enjoy.
Livni is scheduled to meet President Hosni Mubarak in the morning, followed by separate meetings with intelligence chief Omar Suleiman and Foreign Minister Ahmed Abul Gheit. Suleiman met with Hamas leader Khaled Mashaal on Tuesday.
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