The European Union plans to revamp its massive annual aid for Palestinians from next month to make it fit better with the economic reform program of Palestinian Prime Minister Salaam Fayad. EU foreign ministers on Monday are expected to discuss the plan which aims to focus European aid on sustainable, long-term economic development and invite other donors, especially Arab states, to pitch in. EU aid in recent years has totaled some $1 billion annually. The plan stems from last month's Paris donors conference, where Fayad's government received pledges of $7.7 billion over three years. If adopted, the new three-year plan will, from March 31, replace a temporary scheme that paid cash directly to destitute Palestinians when regular foreign aid dried up after the stridently anti-Israel Hamas government came to power in 2006. Those payments will continue through the Fayad government. The World Bank-monitored, ad-hoc scheme bypasses the Hamas movement - a terrorist organization in the EU's eyes - which today runs the Gaza Strip, leaving the rival Fatah government led by Fayad in the West Bank. The Fayad government's program stresses good governance, economic and social development and improved roads and other infrastructure. Diplomats said the EU will provide practical aid to boost the Palestinian police force and help reform health, education and the judiciary. Also on offer is yet unspecified assistance to stoke economic growth while continuing humanitarian aid to both the West Bank and Gaza. While it continues to deliver humanitarian aid to Gaza in the form of fuel or "social allowances" for unpaid civil servants or poor Palestinians, the 27-nation EU will maintain its boycott of Hamas. Until 2006, annual aid to the Palestinians from the EU budget and EU member states amounted to about $733 million. The emergence of the Hamas government that year and the subsequent violence in which the Fatah movement was banished from Gaza aggravated the humanitarian crisis, resulting in a jump in EU aid of about 50 percent in 2006 and 2007. The EU central budget has earmarked $647 million for the Palestinians this year, which will be supplemented by individual donations from EU member nations.