No Funds for Terror

Fatah-Hamas unity government could lead to cut in Palestinian aid

Riad Malki / AP
January 28, 2013

The implementation of a Fatah-Hamas unity government could begin as early as the end of the month, reigniting the legal debate over U.S. financial aid to the Palestinian Authority and heightening tensions between the Obama administration and Palestinian leadership.

Fatah and Hamas signed a unity agreement in the spring of 2011, and reached a leadership decision last February. But the government has not been established and details remain vague. The two parties agreed to start the implementation process during talks in Cairo earlier this month, which sources say could begin as early as Jan. 31.

The Palestinian Anti-Terrorism Act, signed by President George W. Bush in 2006, specifically prohibits aid to a Palestinian unity government that includes a party that does not recognize Israel’s right to exist, such as Hamas. As a designated terrorist organization, Hamas is also barred from receiving U.S. funding.

"The U.S. government will not be able to forward any funds to the Palestinian Authority, because these funds will basically go to Hamas, once they are sitting in the same government," said Israel Law Center attorney Nitsana Darshan-Leitner, who has handled lawsuits against the U.S. government over Palestinian Authority aid.

"U.S. law prohibits the State Department or any American money to fund terrorism. There are special laws against it—the Anti-Terrorism Act, acts congress legislated, specifically in cases of the Palestinian Authority," Darshan-Leitner said.

The Obama administration has not halted aid to the Palestinian Authority since the 2011 unity agreement was signed, arguing that the deal has yet to be executed. However, this position could become more tenuous if the implementation process begins.

According to Jonathan Schanzer, vice president for research at the Foundation for Defense of Democracies, continuing aid would be particularly difficult after Palestinian leadership defied the U.S. with its recent statehood bid at the United Nations.

"It seems like that’s two strikes," Schanzer said. "The Palestinians could insist the Palestinian Authority still remains in place, despite the declaration of the State of Palestine. But then if the unity government comes into place, it’s virtually impossible to say Hamas is not part of the Palestinian Authority."

That could put the Obama administration in a legally and politically difficult position if it decides to defend the continuation of U.S. aid. Tensions were already running high between the Palestinian Authority and the Obama administration after the U.N. statehood vote.

This friction was on full display at the United Nations Security Council meeting last Wednesday, when U.N. Ambassador Susan Rice vehemently objected to the "State of Palestine" label on Palestinian Foreign Minister Riad Malki’s U.N.S.C. placard.

"[A]ny reference to the 'State of Palestine' in the United Nations, including the use of the term 'State of Palestine' on the placard in the Security Council or the use of the term 'State of Palestine' in the invitation to this meeting or other arrangements for participation in this meeting, do not reflect acquiescence that 'Palestine' is a state," Rice said.

When asked afterward by U.N. watchdog Inner City Press whether the comments had been off-the-cuff, Rice replied sarcastically, "Sure, I freelance in the Council."

Observers of U.S. Middle East policy said the heated criticism was unusual, and a sign the Obama administration’s patience with Palestinian leadership may be running thin.

"This is uncharacteristic of the Obama administration to get into that kind of spat over an issue like this," Schanzer said. "Bottom line is the PLO is pushing the U.S., and pretty much every Western country, to a place they will not be comfortable."