The arrests of several hundred Palestinian illegal workers in Israel on Monday and Tuesday are another sorry indication of just how moribund the Palestinian economy has become. It is now so impaired that these men were willing to risk the dangers of infiltrating Israel, as well as arrest once here, just to hold a job - while spending their nights in tunnels and holes in the center of the country, in some cases sleeping next to piles of feces. In the territories, meanwhile, some 140,000 Palestinian Authority employees continue to be denied their salaries while, all too frequently, the "application process" for employment includes the storming of government buildings by armed men who then demand jobs. But the Palestinian economy was in dire straits - due primarily to corruption and absence of planning - long before Hamas's ascension to power resulted in the withholding of financial support by the international community. Over the last decade billions of dollars were donated with few tangible, and almost no self-sustaining, benefits to show for such well-meant assistance. There is Orwellian irony in the fact that Hamas was elected as the "Reform & Change List," given its continued dedication to war with Israel and to eliminating the Jewish State. The resultant withholding of direct funding by international donor states, and, not unreasonably, Israel itself, has led only to the exacerbation of what had already become an untenable economic situation for Palestinians. Thus it is not only Hamas's terror-cultivating intransigence towards Israel's existence but also the PA's dysfunctional economy which should motivate the international community to insist that Hamas comply with its conditions for direct funding: renunciation of violence, recognition of Israel's right to exist and honoring of existing agreements between Israel and the PA. Beyond the fact that these stipulations form the minimal foundation on which a workable peace could ever be built, those who are truly concerned with the daily economic struggles of the average Palestinian should be adamant that Hamas do what will most benefit the people who elected it with hopes of "reform and change." The EU is currently expending notable effort to design a complex mechanism through which humanitarian aid can be delivered to the Palestinians without being touched by the Hamas-led government. In essence the EU is trying to tiptoe around the "elephant in the room" which is Hamas's terrorism-supporting, anti-Israel stance. Israel, too, is caught in the dilemma, anxious to avoid a Palestinian humanitarian crisis but also to turn up the "change or fail" economic pressure on the Hamas-led PA. The trouble is that merely preventing Hamas from directly accessing international aid is not going to force it to modify its opposition to Israel's existence any time soon. Why change such policies when the Palestinians who put it in power are being subsidized by the rest of the world? The arrival of international funding, however stringent the controls on how it is channeled, will improve conditions in the PA areas and thus ease pressure on Hamas, boosting its prospects of maintaining its rule without moderating its policies. Even as it prepares to funnel the most basic and essential humanitarian aid, therefore, the international community must internalize the lessons of having thrown money into the bottomless pit of a terror-ridden, corrupt and economically directionless PA. For all the years that they allowed their financial assistance to be abused by an immoral leadership, donors - like any investors looking for return on their investment - should have insisted on a "business plan," an overall strategy intended ultimately to reduce the Palestinians' dependence on international aid, a strategy that would by definition have necessitated constructive interaction with Israel. They should have set out the goals to be achieved with donated funds, and the benchmarks for determining progress. And the funding should have been explicitly conditioned on such progress. So long as it is led by an unreconstructed Hamas, of course, to even talk of a recovery plan for the PA is pointless and misguided. For now, the international community, and Israel, need to concentrate on minimizing the benefits that Hamas can derive from donors' humane instinct to alleviate suffering - even when those who are suffering brought their plight upon themselves by electing a terror group as their leadership.