Russia offers to bail out cash-poor Hamas government

Russia offers to bail out Hamas government after the West cancels aid payments.

Russia has offered to bail out the financially troubled Hamas-led government of the Palestinian Authority, raising the spectre of a confrontation with the United States and the European Union.

Russian Foreign Minister Sergey Lavrov said Saturday that Moscow was willing to provide immediate aid, an offer that was gratefully accepted by Palestinian President Mahmoud Abbas.

Lavrov criticized the boycott by the West of the Palestinian government, saying such boycotts would destabilize the region even more.

It was better, Lavrov said, to work with the Hamas leadership than against it. In that way, Russia hopes to persuade Hamas to soften its militant ideology and meet international demands to recognize Israel and give up violence.

Lavrov did not say how much money Russia planned to offer, but the Hamas-led government is clearly desperate for money.

It is two weeks behind in salaries for 140,000 Palestinian government employees, leading to a riot in Gaza's central town of Khan Younis Saturday when angry workers stormed a government building demanding their back wages.

The government is short of cash because Israel is holding back roughly $55 million US in monthly taxes it collects on behalf of the Palestinian Authority. The European Union has frozen hundreds of millions of dollars in annual aid payments, while the United States and Canada have halted government assistance.

Washington will also forbid Americans to do business with the Hamas government, according to a memo obtained by the Associated Press on Friday.