World

Iran Offers To Help Fund Palestinians

February 22, 2006 / 9:25 AM EST / CBS/AP

Iran offered Wednesday to help finance a Palestinian Authority run by the Hamas militant group, state radio reported.

Israel promptly warned the Palestinians that if they accepted Iranian money, they would be aligning themselves with an "international pariah."

But acting Israeli Prime Minister Ehud Olmert said Wednesday that Hamas is not a strategic threat to the Jewish state, despite the offer from Iran.

Israel considers Iran its staunchest enemy and promptly warned the Palestinians against aligning themselves with an international "pariah." But Olmert's comments signaled that Israel will refrain from military action, even as it presses forward with its efforts to isolate Hamas diplomatically.

In other developments:

Hamas has held talks with the defeated and more moderate Fatah party, to discuss a possible partnership in the new government, reports CBS News correspondent Robert Berger (audio). But Fatah, which has ruled the Palestinian Authority since its creation in 1994, has been cool to the idea.

Fifteen masked gunmen stormed the government office in the southern Gaza Strip town of Rafah early Wednesday, protesting the appointment of Rafah's new governor, whom they said is not a resident of Rafah. Zuhdi Qudra, a former PLO ambassador to Egypt who is from Gaza City, was appointed by Palestinian leader Mahmoud Abbas last week.

Olmert defended his government's decision to give the Palestinian Authority $50 million in taxes collected by Israel earlier this month. He told a parliamentary committee the Palestinians used the money to repay debts to Israeli companies and to pay salaries, but not for terrorism. Another payment earlier this week was withheld.

An Israeli group has filed suit in Germany against Iranian President Mahmoud Ahmadinejad for denying the Holocaust occurred. A 2005 law permits filing international cases at the German court, even when Germany is not involved in the case. Another law, passed in 1993, forbids Holocaust denial.

The secretary of Iran's Supreme National Security Council, Ali Larijani, announced his country's offer after a meeting with Khaled Mashaal, the political leader of the Hamas, in Tehran, the radio said.

Larijani said the decision was taken after the United States said it would not provide aid to an authority governed by Hamas until the group renounced violence, recognized Israel and agreed to abide by existing agreements between Israel and the Palestinians.

"The United States proved that it would not support democracy after it cut its aid to the Palestinian government after Hamas won the elections. We will certainly help the Palestinians," Larijani said, according to the radio.

The United States and European Union, which consider Hamas a terrorist group, have said they will halt their grants of hundreds of millions of dollars of aid to the Palestinian Authority after a Hamas government takes office unless it changes its attitude toward Israel and violence.

Hamas has long called for the destruction of Israel and has refused to negotiate with the Jewish state. Its leaders have refused to change their policies since the group won last month's Palestinian elections by a landslide.

On Tuesday, a moderate Hamas leader, Ismail Haniyeh, was asked to form a government by Abbas.

In Jerusalem, Israeli Foreign Ministry spokesman Mark Regev said: "The incoming Palestinian leadership has to decide if it wants to be part of the legitimate international community or if it wants, through its own actions, to align itself with international pariahs."

Israel accuses Iran of supporting militant groups, such as Hamas and the Lebanese Hezbollah, and of seeking to produce nuclear weapons. Last year Ahmadinejad said Israel should be "wiped out."

Asked if Israel would try to block the Iranian money, Regev replied that as the money would be going to a "terrorist" leadership, "we would be entitled to use all legal means to prevent that money from reaching its destination."

Earlier this week, Israel froze the transfer of about $50 million in tax money it collects for the Palestinians each month, its first response to the inauguration of the new Hamas-led parliament last Saturday.

Addressing a closed session of parliament's Defense and Foreign Affairs Committee, Olmert signaled that Israel will continue to squeeze the Palestinians through diplomatic — not military — action.

"Hamas is not a strategic threat," he said, according to meeting participants.

He said the Palestinian Authority will be "contaminated with terror" once a Hamas Cabinet takes power, which will happen within five weeks. "We will not pass any more money to the Palestinian Authority," he was quoted as saying.

The Palestinians are heavily dependent on the Israeli tax transfers and international aid. Undeterred by the Western threats, Hamas has turned to the Arab and Islamic world for help.