Foreign Minister Tzipi Livni met on Sunday with Palestinian Authority Chairman Mahmoud Abbas in the first high-level talks between the two sides since Hamas came to power, and announced that the government had decided to transfer NIS 50 million worth of humanitarian aid to the PA. The funds, which are a portion of the Palestinian VAT fees collected and held by Israel, would be used to provide medical supplies and medicines, she said. Israel withheld the funds following Hamas's landslide win in the Palestinian legislative elections. "We are in a very complicated situation," Livni told reporters as she left the meeting with Abbas, Vice Prime Minister Shimon Peres and chief Palestinian negotiator Saeb Erekat at the fourth annual World Economic Forum in the Middle East (WEF) in this Egyptian resort town. "There is a need to delegitimize the Hamas government as such because it is a terrorist organization," she said. "On the other hand, we want to help the Palestinian people. It is not Israeli government policy to punish the Palestinian people for their vote, [but] to help the Palestinian people in any economic and humanitarian way that we can... this was part of the discussion between us and Mahmoud Abbas." In a speech delivered after the meeting, Abbas said that the Hamas-led PA government did not object to him negotiating with Israel. He promised that any agreement reached between the two sides would be brought before the Palestinians as a referendum. Livni told The Jerusalem Post on the sidelines of the conference that "I think the road map is still a viable program for peace." Nevertheless, she said, "more preparation" was needed before a meeting between Abbas and Prime Minister Ehud Olmert could take place. "It seems to me that this is not the last meeting; it certainly shouldn't be, and that is the understanding between us." Even as Livni planned these preparations, however, Olmert questioned Abbas's ability to represent his people in negotiations. "He is powerless. He is helpless," Olmert told CNN's Late Edition. "He's unable to even stop the minimal terror activities among the Palestinians. So how can he represent that government in the most crucial, complex and sensitive negotiations, about which there are so many divisions within the Palestinian community?" Livni and Abbas met four times in back-to-back sessions at the WEF. The initial 45-minute bilateral meeting was followed by a meeting with Egyptian President Hosni Mubarak at the Royal Club. Directly after that, the tired-looking politicians sat at a luncheon for conference participants, where they discussed the future of the Palestinian economy. That was followed by a plenary session opened by Abbas, where hundreds of participants listened to a debate between Livni and Erekat. At each of the events, Livni reiterated that Israel stood behind a two-state solution. "We believe the Land of Israel - as we call it - needs to be divided: Israel for the Jewish people and Palestine for the Palestinian people," she told the plenary session. When asked by an Arab member of the audience about the nature of the security fence and Olmert's convergence plan to unilaterally withdraw to the fence, Livni answered, "The fence can be moved. It's just a fence. The final borders will be negotiated with the Palestinians." Erekat drew applause from the audience when he criticized the unilateral plan. "The wall is in the heart of the West Bank," he said. "You say you have a plan, but it determines my future. We don't have an army, tanks, an air force, a navy. But no force on earth can force a Palestinian to sign on anything less than a Palestinian state on the '67 border." Both Abbas and Erekat expressed concern over whether the escalating violence between Hamas and Fatah could turn into a civil war. "It's very alarming, very serious and very dangerous," said Erekat. Abbas said that an all-out war between the two sides was a "red line that nobody dares cross, no matter which side they are on... Civil war is forbidden." He announced that a "National Dialogue" would begin on May 25. Meanwhile, Munib al-Masri, one of the wealthiest Palestinians in the territories and an adviser to Abbas, announced the launching of a Palestinian private-sector initiative to take part in the decision-making of the country. Some 54 large Palestinian companies have already signed on, he said. "We are fed up," said Masri, who is the chairman of Padico, a Palestinian trading company. "The Israeli occupation is the cause for everything, but we must do something ourselves to stop the roller coaster from going downhill."