RAMALLAH - As Palestinians prepare to vote on Wednesday in the second parliamentary election since the signing of the Oslo Accords, several lists and candidates expressed deep concern over reports that the US was providing financial aid to the ruling Fatah party. The Palestinian Elections Law sets specific provisions for the financing of electoral campaigns. Lists and candidates are forbidden from receiving, directly or indirectly, campaign funding from foreign sources and the Palestinian Authority. In addition, the law sets the expenditure limit for an electoral list at $1 million. The limit for spending on a single candidate's campaign for the parliamentary election is $60,000. But Fatah officials have revealed that they had allocated about $4 million for their campaign, prompting rival factions to demand an inquiry into the source of funding. Many candidates have also accused Fatah of utilizing PA institutions and personnel for its campaign. According to a report in Sunday's Washington Post, the US is providing discreet financial support to the PA to strengthen it against Hamas. The US Agency for International Development (USAID) has made available some $2 million toward bolstering the image of the PA by indirectly supporting the ruling Fatah party, the report said. The assistance is aimed at countering the rise of Hamas, which the US considers a terrorist organization, without the US government logo appearing on the projects or events being funded, the report said. The funding was going toward cleaning streets, planting trees and providing water and food supplies at border crossings, among other things, according to the Post. "We are not favoring any particular party," said James Bever, USAID mission director for the West Bank and Gaza Strip. "But we do not support parties that are on the terrorism list. We are here to support the democratic process." The revelation, which has caused uproar among many Palestinians, coincided with allegations that a number of candidates and lists were receiving huge sums of money from the US and some European countries. Hamas leaders demanded an immediate investigation into the source of funding of Fatah and other lists. Hamas leader Mahmoud Zahar condemned as "filthy and immoral" the reports that the US was helping Fatah. "The Americans brought [President Hamid] Karzai to Afghanistan, a puppet government to Iraq and now they are trying to meddle in the affairs of Palestine by paying bribes," he charged. "This is a flagrant intervention in the internal affairs of the Palestinians," said Ismail Haniyeh, head of Hamas's Reform and Change list. "Our people will reject anyone who comes with the help of American dollars and tanks." Bassam al-Salhi, who is running as a candidate on the leftist Badeel list, said the US aid to some parties was "in violation of the Palestinian law and an aggression on our democracy." He urged PA Chairman Mahmoud Abbas to order an investigation into the allegations and to publish the findings as soon as possible. Ahmed Majdalani, head of the Popular Struggle Front list, said he had long suspected that some lists were receiving financial aid from the US. "Some lists are spending a lot of money and we want to know the source of funding," he said. Majdalani and other candidates claimed that some lists had violated the law by spending millions of dollars on their election campaigns. A leaflet distributed in Hebron claimed that the Third Party, an independent list headed by former finance minister Salaam Fayad, and the Independent Palestine list headed by Mustafa Barghouti were among many parties that were being funded by foreign governments. The leaflet was signed by Fatah's armed wing, Aksa Martyrs Brigades. Hatem Abdel Kader, a Fatah candidate from Jerusalem, dismissed the allegations as untrue. "Fatah's election campaign isn't being financed by any foreign party," he told The Jerusalem Post. "In fact, our budget is smaller than that of other lists. These reports are aimed at harming Fatah." Rakif Husseini, director of Abbas's bureau, also denied that Fatah was receiving financial aid from the US. "The $2 million that was mentioned in the media were given to the Palestinian Authority, not Fatah," he explained. In a debate on Lebanese TV, Hamas's Zahar criticized the PA for dealing with Israel, while Fatah candidate Muhammad Dahlan challenged him to explain how Hamas would solve problems that require Israeli intervention, such as crossings between PA territories and Israel. "It's time for you to discover the suffering of being in government," Dahlan said. In a television interview, Abbas said he expects Hamas to accept peace talks and place its arms under government control once it joins parliament. "What we see is that Hamas may change its views," he told Al-Arabiya. "It is not enough to come to parliament and say my positions are not changeable... this will not be acceptable." Meanwhile, Zahar also raised the possibility of holding negotiations with Israel through a third party. "Negotiation is not a taboo," he said. He said Hamas would be willing to talk to Israel through a third party, similar to past negotiations between Israel and Hizbullah. AP contributed to this report.