European leaders are likely to approve contact with Palestinian Authority functionaries, even if they are affiliated with Hamas-led ministries, to ensure the flow of humanitarian aid, European Union envoy Marc Otte has indicated to The Jerusalem Post. Otte made clear in an interview, however, that EU foreign ministers scheduled to meet on April 10 to draw up guidelines for relations with the new Hamas-led PA would continue to rule out any type of political or diplomatic dialogue with Hamas. A policy of approving "technical" contact with the PA, but ruling out political contact, would place the EU at odds with the US, which ruled out contact by US officials with any PA official or functionary who is under the authority of PA Prime Minister Ismail Haniyeh or who works in a Hamas-led ministry. At the same time, the US will allow contact with PA Chairman Mahmoud Abbas and officials in his office, agencies directly under Abbas's control and Fatah members of the Palestinian Legislative Council who are not in the government. Acting Prime Minister Ehud Olmert is expected to hold discussions next week to discuss his government's relationship with the new PA and what level of contacts would need to be maintained on a day-to-day level. Olmert spoke Thursday evening with Egyptian President Hosni Mubarak, the second time they have talked since Olmert won the March 28 elections. They agreed to meet immediately after Olmert forms a government, and the issue of how to deal with the new reality in the PA will obviously loom very large. Otte said that the Europeans had not yet made as sweeping a decision regarding contacts with the PA as had the US, and "are looking carefully at what it means to implement the duty we imposed on ourselves to meet the basic needs of the Palestinians." "This has to be done in a rational manner," he said. "There is a clear line between delivering on the promise to deliver humanitarian aid, and deciding to have a political dialogue with Hamas. The latter is excluded unless Hamas changes." Regarding functional contact, however, he said "one has to take a realistic position that there should be a clear distinction between having dealings of a political nature with Hamas, and making sure that medication, water or electricity get to the right people." Otte, speaking from his office in Brussels, said the EU would continue humanitarian assistance to the PA, and it was clear that a lot of these services would need to be delivered through the PA ministries. "If electricity breaks down, you have to repair a power station, you can't just send an e-mail," he said. In Washington, meanwhile, Secretary of State Condoleezza Rice is expected to announce within the next two weeks how the US planned to bypass the PA while continuing to funnel some $300 million a year to the Palestinians. Western diplomatic sources said that, while in 2005 some $50 million went to infrastructure development in the Gaza Strip and an even greater amount was earmarked for that purpose in 2006, those funds would now go instead to humanitarian needs and be channeled through various NGOs, with more money going through UNRWA than in the past. The officials said that if total US aid to the Palestinians stood at about $325 million in 2005 it would likely be slightly less this year. Reuters reported that a draft document to be submitted to the EU foreign ministers when they meet on Monday recommended not cutting all contact with the Hamas-led PA, but rather noted that if Hamas did not renounce violence, recognize Israel and accept previous agreements - the three international benchmarks for legitimacy - it would impact on the EU's direct assistance to the PA. The EU contributes more than $600 million a year to the PA. Reuters quoted diplomats as saying that the Czech Republic lobbied for a complete EU break with the PA while France, Sweden, Denmark and Finland were most strongly in favor of giving Hamas more time to change. Senior Israeli officials said that the Czech Republic and Poland, among the newest entries into the EU, had been the strongest supporters of maintaining a firm line against Hamas, along with longtime EU members Germany, Italy and Britain. Otte said that if Hamas were given more time it would need to take more than "baby steps" toward meeting the international community's benchmarks. "We have to see the rhetoric matched by deeds, and the other way around," he said. Otte added that Hamas could possibly meet the benchmarks by saying it was ready to negotiate with Israel, which would imply recognition; continue to abide by a cease-fire, which would indicate it had given up terrorism; and refrain from infringing previous agreements with Israel, which would imply acceptance of them. Despite this, however, he said the EU had no intention of bailing the PA out of a looming fiscal crunch as it had last month, when it freed up millions of dollars so that the PA could pay salaries. This month, he said, the PA would have to look elsewhere for the money. Otte reiterated the EU position that Israel should continue transferring revenue and customs payments to the PA, which have been held up since Hamas members were sworn in to the Palestinian Legislative Council in March. He indicated, however, that there would be little pressure on Israel to do so at a time when Olmert was busy trying to put together a government. He also indicated that one way Israel could transfer the money and ensure it not be used for terrorist purposes would be to use it to pay the PA's water, gas and electricity bills. "Israel has to take a stance about what it plans to do with this money," Otte said. "Israel has said it would continue to provide electricity and water to the PA; who is going to pay for them?" Asked what Europe would like to see Olmert do immediately after assuming office, Otte said that extending an invitation to Abbas to negotiate would be a "huge confidence-building step" and a move the EU would obviously support. Making an interesting legalistic distinction, he pointed out that the PLO, not Hamas, conducts negotiations on behalf of the Palestinians.