Hamas’ graduation from militant group to democratically-elected government struck a serious blow to the prospect of peace in the Middle East. Aside from the obvious risk to Israel, the Anglosphere (Britain, USA, Canada, etc) was faced with a particularly delicate situation: the involved countries have been the dominant force in recent peace negotiations between Israel and the Palestinian territories. Was it more dangerous to legitimize a group synonymous with terrorism than it was to ignore the democratic will of people being wooed towards secular democracy? The decision was swift and unmistakable - Hamas would not be recognized.
Prime Minister Stephen Harper was the first international leader to condemn Hamas, throwing his support unconditionally behind Israel. The U.S. followed suit of course and once again North America dismissed itself from any potential role as a mediator in the conflict. Showing a little more foresight, Russia received the democratically-elected government as a legitimate political body, albeit with some strong warning about conduct.
To be sure, Hamas hasn’t helped its case for diplomatic legitimacy. Though the Palestinian organization has an official ceasefire with Israel, it has not ceased condemning the existence of the Jewish state. Islamic Jihad’s recent suicide attack in Tel Aviv was declared legitimate by the Hamas government:
We think that this operation … is a direct result of the policy of the occupation and the brutal aggression and siege committed against our people
-Khaled Abu Helal (spokesman, Interior Ministry)
Hardly the words of a government interested in building a Palestinian state capable of living peacefully alongside its neighbours. As most of the international community demands nothing less, Hamas will have few public supporters.
However, it was the withdrawal of funding that the USA and friends hoped would cripple Hamas into irrelevance (or negoatiation). For awhile it did seem that the funding cut would bankrupt the Palestinian Authority. Then it happened:
The government of the Islamic republic invites all countries to help the Palestinian government and nation, and announces the allocation of 50 million dollars to help the Palestinian government and people
-Manouchehr Mottaki, Iranian Foreign Minister
Perhaps Iranian assistance to Hamas was predictable, but then America was sideswiped by one of its few allies in the region:
Staunch U.S. ally Qatar said on Monday it would give $50 million in aid to the Palestinian Authority despite calls from Washington and European Union to halt funding unless the Hamas-led government recognizes Israel. The Gulf Arab state, which hosted the command center for the U.S. military in the 2003 Iraq war, said the aid decision “stems from Qatar’s support for the Palestinian people”.
-Reuters Report (April 17, 2006)
- So what really was accomplished by cutting off aid to the Palestinian Government?
- Hamas no longer has any reason to listen to the West, given it must now function financially without Western aid
- Iran will continue to emerge as a power of importance by providing official “aid†to legitimately elected governments (that just happens to support terrorist activities beneficial to Iran’s geopolitical strategy)
- Mahmoud Abbas is a sitting duck in Palestinian government and may sink further into irrelevance
Could the Anglosphere’s one-sided approach to mediation have finally backfired? Without holding a serious trump card on the magnitude of financial dependency against the disfavored camp, the Anglosphere has been reduced to a mere client of one side rather than the mutually dominant force that could have compelled a peace agreement between two stubborn foes.

http://english.aljazeera.net/NR/exeres/89C2CC32-472E-4341-9776-27A61AAC9EB0.htm
“The PA needs $116 million to cover the monthly payroll. ”
I read somewhere that the PA has a budget of around a billion dollars a year. So they’ve picked just picked up 100 million from a couple of (likely) onetime donors which gives them another month of breathing space. Maybe less because Japan just pulled their funding this morning.
I think they are (and will continue to be) in deep financial trouble until they give up their hateful ways. That’s fine with me.
Also, I’ve thought for years that had the Palestinians held out the hand of friendship to Israel rather than the hate they continue to display, the economy you mention would by now be fact rather than an unrealized dream.
As things are now I can’t see that happening.