Shortly after Hamas won the Palestinian elections in January, I predicted that the world's firm stance against aid to the terrorist movement-cum-political party would last, at most, six months. And indeed, the European Union has been seeking a face-saving method of ending the boycott for weeks. The United States, in contrast, had stuck to its guns impressively until this week - but now, it, too, appears to have cracked. Over the past few weeks, EU member states and institutions have raised various ideas for circumventing the boycott. France suggested establishing a World Bank fund that would pay salaries to Palestinian Authority employees directly; this would substitute for the old system under which the EU gave money to the PA and it paid the salaries. Britain also proposed paying PA employees' salaries directly, via a nonprofit organization, the Holst Fund. And the European Commission suggested giving the money to PA Chairman Mahmoud Abbas, who belongs to the rival Fatah party rather than Hamas, so that his office could pay PA salaries instead of the Hamas government. All three proposals also included funding for specific governmental activities; again, the money would simply be disbursed by the World Bank/Holst Fund/Abbas instead of the Hamas government. The goal of these plans is to ensure that most or all PA employees (some of the proposals exclude certain personnel) continue receiving their paychecks as usual, and that the Palestinian government basically continues operating as usual. Yet that would undermine the boycott's raison d'etre - which was to exact a price from Hamas for its refusal to renounce terrorism and recognize Israel. To retain power, the Hamas government must prove that it can function. The conventional wisdom is that the Palestinians ousted the previous Fatah government because of its corruption and inefficiency; if this is true, a Hamas government incapable of providing basic services would presumably be equally unattractive. But under the EU proposals, government operations would be unimpaired by Hamas rule: Salaries would continue to be paid, and services would continue to be provided. The idea that how the money is routed matters to anyone is laughable: From the Palestinians' perspective, as long as the government is functioning, Hamas is doing a fine job, regardless of whether it makes salary payments itself or persuades the international community to make them in its stead. MOREOVER, since money is fungible, Hamas would even have funds left over for its own agenda. With donor states paying government salaries and covering the operating expenses for big-ticket items such as schools and hospitals, Hamas would be free to use those funds in its possession - the PA's independently collected tax revenues plus any donations from Arab or Muslim states - for other purposes. Thus the EU's claim that such a system would prevent money from being diverted to terrorism is ludicrous: By funding government operations, the EU absolves the Hamas government of the need to use its own revenues to provide basic services, and it thereby makes these revenues available for terror instead. Unlike the EU, the US had hitherto seemed to understand that the boycott was meaningless if the world continued to finance the entire Palestinian government. Thus while Washington favored genuine humanitarian aid, such as essential drugs for hospitals, it correctly argued that paying government employees' salaries did not qualify. For this reason, it initially vetoed all the EU proposals, and even managed to forestall Arab donations to the Hamas government by warning banks that since Hamas was a terrorist organization, transferring such funds would violate US law. The implicit threat - that banks that handle such transfers could face legal action, or even be forced to abandon one of the world's leading financial centers - has reportedly caused even Arab banks to refuse to do so. However, this impressive American determination apparently could not survive the mounting outcry from Europe, the media and nongovernmental organizations about the growing "humanitarian crisis" in the territories: At a meeting of the Quartet on Tuesday, Washington agreed to "a temporary international mechanism" for aid to the Palestinians; and while the details are still under discussion, the arrangement will reportedly include salary payments to PA workers as outlined in the various European proposals. SHAMEFULLY, even Israel has recently been waffling on this issue - which undoubtedly contributed to America's capitulation. Asked for comment on French President Jacques Chirac's proposal, Foreign Ministry spokesman Mark Regev told the Associated Press that no aid should go to the Hamas government, but "everyone understands that the Palestinian people should not be made to suffer because of the shortsightedness, stubbornness and extremism of their government" - a statement that implies support for ideas of this ilk. Indeed, the minute one accepts this distinction between "the people" and "the government," the battle is already lost - because unlike in a dictatorship, where such a distinction is valid, the Palestinian people chose this government freely. Nor, contrary to the accepted wisdom, did they do so solely as a protest vote, despite disagreeing with Hamas's political positions: In fact, a poll conducted in Ramallah two weeks ago found that 63 percent of Palestinians support Hamas's refusal to recognize Israel. To say that ordinary Palestinians should not suffer because of the government they themselves elected, and whose objectionable policies they continue to support, is thus to ensure that they have no incentive not to reelect Hamas in the future. Agreeing to fund PA salaries and other governmental activity would make a mockery of the international aid boycott and facilitate the Hamas government's survival. And by proving that a policy of Islamic extremism entails no long-term price, it would also encourage the election of similar governments elsewhere in the Middle East. Thus, for its own sake as well as Israel's, one must hope that the US will rethink this disastrous idea before it is too late.