MIDDLE EAST:Israel seemed to be preparing yesterday to ease economic sanctions in the West Bank while planning to keep them in place in Gaza as part of a bid to boost moderate Palestinian leaders and marginalise Hamas, following the Islamic movement's seizure of control in the coastal strip.
In a phone conversation with Egyptian president Hosni Mubarak, prime minister Ehud Olmert assured him that Israel would bolster Palestinian president Mahmoud Abbas, who heads the more moderate Fatah movement. A statement released by the prime minister's office quoted Mr Olmert telling the Egyptian leader that "Israel will do all it can to help moderates in the Palestinian Authority after the radical Hamas took Gaza by force."
Along with western states, Israel imposed economic sanctions on the Palestinian Authority after Hamas, which refuses to recognise the Jewish state, beat the more moderate Fatah in elections 17 months ago.
But the decision on Thursday by Mr Abbas to disband a Hamas-led national unity government and declare a state of emergency has opened the way for Israel and the West to renew aid.
"The fact that President Abbas has fired the Hamas government is a very positive move in our opinion, and makes it easier to deal with and help the moderates," said Miri Eisin, a spokeswoman for Mr Olmert.
Israel has frozen the transfer of hundreds of millions of dollars it collects in customs duties on behalf of the Palestinian Authority and Mr Abbas is said to be seeking the transfer of about $700 million.
Mr Olmert will be in Washington next week for a meeting with President Bush and he is likely to hear a similar approach to the one he is adopting: reward the moderates, punish the extremists.
In addition to releasing funds to Mr Abbas, the Americans are also likely to ask Israel to make other concessions, such as relieving suffocating travel restrictions in the West Bank, to bolster moderate forces there.
In Gaza, the embargo will be maintained and could even be tightened along the Egyptian border where militants smuggle weapons into the strip via underground tunnels.
There has been some speculation over whether Israel might try to renew talks with Mr Abbas - with an eye to achieving agreement in the West Bank alone - now that he has disbanded the Hamas-led unity government.
But the Palestinians view the West Bank and Gaza as inseparable entities and the Palestinian president will likely be reluctant to attend any talks that are premised on a separation between the two areas.
While the idea of deploying an international force in Gaza has been revived in recent days, Israeli officials are sceptical that western or Arab states will ever send troops into the densely-populated, impoverished strip.
Mr Olmert, nevertheless, has asked his national security council and the foreign ministry to prepare a position paper on the matter, and he is scheduled to discuss the idea with UN secretary general Ban Ki-moon in New York tomorrow.
Reuters adds: Former prime minister Ehud Barak will be named Israel's defence minister next week in a reshuffle of the coalition cabinet rushed through in response to the situation in Gaza, officials said yesterday. They said ministers agreed to nominate Barak, who this week replaced the current defence minister, Amir Peretz, as leader of the Labor Party.