I’m very sorry to report that the UK is caving in to Hamas: Britain backs Palestinian trust fund.

A PROPOSED trust fund for donors to pay overdue Palestinian salaries would undercut Hamas, not strengthen it, says a British document meant to increase pressure on the US to drop objections to the plan.

Britain circulated the memo on the proposal, aimed at averting a collapse of basic services provided by the Palestinian Authority, to major donors before tomorrow’s meeting of the Quartet of Middle East mediators.

The four-page document argues, in response to US efforts to block creation of such a fund, that it “will not undermine the diplomatic effort” to persuade Hamas to renounce violence, recognise Israel and abide by interim peace accords.

The US is concerned that allowing the international community to pay Palestinians’ salaries would take pressure off Hamas, Western diplomats said.

But Britain argues that if Palestinians end up receiving crucial aid through channels other than Hamas, the Islamic militant group stands to lose “a big part of its street credibility and hence have an incentive to come closer to what the international community wants”.

This rationale for bailing out Hamas is a perfect summation of the socialist European left’s bizarre disconnect from reality. Wishful thinking as international policy.

From Friday’s post-mosque demonstrations in Gaza:

UPDATE at 5/7/06 4:47:06 pm:

As the Quartet prepares to meet this week, pro-Palestinian forces are starting the big push to legitimize Hamas; now it’s the World Bank’s turn: World Bank says underestimated Palestinian crisis.

JERUSALEM (Reuters) - The World Bank warned donors on Sunday that the financial crisis gripping the Palestinian Authority since Hamas won election was deeper than it first thought and could render the West Bank and Gaza ungovernable.

In a memo circulated among major donors and obtained by Reuters, the World Bank also said an existing aid program could be expanded to pay for the salaries of employees of the Hamas-led government.

In March, the World Bank projected that by the end of 2006 Palestinian poverty and unemployment levels would rise to 67 and 40 percent, and personal incomes would drop by 30 percent.

“We now consider these figures underestimates,” it said in the memo.

Western diplomats said the World Bank circulated the memo ahead of a meeting in New York on Tuesday of the Quartet of Middle East negotiators — the United States, the European Union, Russia and the United Nations.