Western powers vow to end embargo on Abbas govt

By Mohammed Assadi

RAMALLAH, West Bank - Western powers said on Monday they would end a 15-month-old embargo on the Palestinians in a boost to President Mahmoud Abbas's government after he sacked Hamas Islamists who seized the Gaza Strip.

Abbas sought to exert authority over the Hamas-controlled territory and stripped the group of its representation on the national security council.

Abbas told U.S. President George W. Bush by phone that the time had arrived to resume serious peace talks.

"The government will pursue its jurisdiction over all parts of the homeland, regardless of what happened in Gaza," Abbas's Information Minister, Riyad al-Malki, told reporters after the new government met in the West Bank city of Ramallah.

Abbas formed the new cabinet last week in the West Bank after the Hamas Islamist group routed security forces dominated by his Fatah movement in Gaza.

It is unclear how much influence Abbas's government can have in Gaza, now a Hamas fiefdom that is separated from the West Bank by 30 miles of Israeli territory.

Abbas's forces want to prevent any spillover of the fighting from Gaza to the West Bank, where Fatah holds sway under Israeli occupation and where Hamas has threatened reprisals.

An aide to Abbas said Iran had encouraged the Islamist group Hamas to use violence to take control of the Gaza Strip.

"Iran supports non-democratic groups in Palestine, Lebanon and in Iraq and we hold Iran responsible for encouraging Hamas to carry out its coup in Gaza," Yasser Abed Rabbo said.

A Hamas spokesman said the charges were "weak and false".

Hospital staff said a senior operative of the al-Aqsa Martyrs Brigades, an offshoot of Abbas's Fatah faction, was killed and another man was critically wounded in a gun battle near a main border crossing between Israel and the Gaza Strip.

BULLETS AND GRENADES

Hamas militants said they fired at the Israeli army and that the man was killed by Israeli gun fire. An Israeli army spokesman denied that shots fired from an Israeli lookout, which had also come under attack, caused the death.

He said a gunman from Gaza sprayed bullets and threw grenades at Palestinians waiting at the crossing.

Ismail Haniyeh of Hamas has said he still considers a 3-month-old unity coalition in which he is prime minister as the legitimate Palestinian government and accuses Abbas of participating in a U.S.-led plot to overthrow him.

Speaking at a news conference in Washington, Secretary of State Condoleezza Rice said the United States would "resume full assistance to the Palestinian government and normal government to government contacts".

Washington imposed a financial embargo on the Palestinian government when Hamas rose to power in early 2006 and refused to recognize Israel.

The European Union said it wanted to resume direct aid to the Palestinians, but did not say when it would begin to do so.

Israeli Prime Minister Ehud Olmert said in New York that Israel would release frozen tax revenues to Abbas and "take perhaps more risks" in cooperating with Abbas's government.

Washington wants to accelerate talks between Olmert and Abbas on Palestinian statehood in the West Bank, while isolating Hamas economically, diplomatically and militarily in Gaza.

The Jewish state renewed full fuel supplies to Gaza after halting them a day earlier, but issued orders to block cargo shipments to the strip.

An Israeli defense official, Shlomo Dror, said Israel may airlift food if necessary to avert a humanitarian crisis for 1.5 million Palestinians living there. Key crossings between Israel and Gaza have remained largely shut for days.

Palestinians in Gaza stocked up on extra food.

Israeli Foreign Minister Tzipi Livni, who met European foreign ministers in Luxembourg, said Israel should seize an opportunity offered by the political divisions between the West Bank and Gaza.

Hamas officials in the Gaza Strip said they were pressing kidnappers of BBC correspondent Alan Johnston to free him by the end of Monday.

(Additional reporting by Adam Entous in Jerusalem, Nidal al-Mughrabi in Gaza, Jeffrey Heller in New York and Paul Eckert in Washington)