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The European Union on Friday threatened to cut off aid to a Hamas-led Palestinian government "unless it seeks peace by peaceful means" — its strongest signal yet to the new leadership.

The EU foreign ministers reviewed financial aid to Palestinians but announced no immediate halt to funds as long as Hamas has not formed a government.

"We want to remain a reliable partner for the Palestinian people, but we will not go soft on our principles," EU External Relations Commissioner Benita Ferrero-Waldner said at the outset of two days of informal talks by EU foreign ministers in Salzburg. "Money will not flow to the new (Palestinian) authority unless it seeks peace by peaceful means."

German Foreign Minister Frank-Walter Steinmeier said the EU wants to see the Hamas-led government's platform to find out what it thinks of the 'road map' to Middle East peace drafted by the United States, the EU, Russia and the United Nations.

The EU expects a Hamas-led government to recognize Israel, renounce violence and accept all previous agreements between the Palestinians and Israel.

If it does not do that, "there can be no cooperation," said Steinmeier, who added that the EU has so far not seen any "meaningful signals" from Hamas.

The decision to hold off on cutting aid was seen as a bid to pressure Hamas, which won the Jan. 25 Palestinian parliamentary elections, to shed its strident anti-Israel views and ensure EU aid continues to ease economic plight of the Palestinian people.

Israel has already halted monthly transfers to the Palestinian Authority of some $50 million in tax receipts following Hamas' election victory.

The 25 EU foreign ministers grappled with the question of how Europe can remain the largest donor for the Palestinians without any of their aid ending up in the till of a government led by a faction both the United States and the EU consider a terrorist organization.

French Foreign Minister Philippe Douste-Blazy urged Hamas to take action on the demands, but said money must still make its way to the Palestinian people.

"We must avoid an economic suffocation of the Palestinian territories," Douste-Blazy said. "If we want to avoid social chaos, economic chaos and security chaos, it is in our interest to help the Palestinian population."

Hamas lawmaker Mahmoud Zahar reacted angrily to the demand his group falls in line with the peace process.

"What are the peaceful means?" he asked. "Do they want us to respect Israel's decision to kill and detain our children?"

He urged the EU to issue a response to Israeli actions against Palestinians. "They shouldn't just talk about the Palestinians, but also about Israel," he said.

EU foreign policy and security affairs chief Javier Solana presented the ministers with an update of current aid programs he co-wrote with Ferrero-Waldner. The paper offered no funding options nor a recommendation for an immediate cutoff of EU aid.

In 2005, EU governments and the EU executive commission together gave about $600 million to the Palestinian Authority.

Officials said half of that came from the European Commission, whose annual aid fluctuates.

EU aid for the Palestinian Authority includes funds to pay for salaries and administration costs.

Before the EU foreign ministers' meeting, a Foreign Office spokesman in London said Britain was not prepared to fund or deal with terrorists but added that the Palestinian people should not be punished.

This week, Russian Foreign Minister Sergey Lavrov urged Hamas to respond positively to international calls to recognize Israel and start a dialogue with the Jewish state.

French President Jacques Chirac said in Saudi Arabia this week he was confident Hamas will recognize Israel and renounce violence after Ismail Haniyeh, the Palestinian prime minister-designate, forms a government later this month.

On Feb. 27, the EU granted US$143 million in urgent aid for Palestinians before a Hamas-led government takes office. The aid was designed to avoid the collapse of the Palestinian Authority.

The United States has already ruled out money for the Hamas government and is considering continued financing without money going to Hamas.

(Chinadaily.com.cn via AP March 11, 2006)