Egyptian President Hosni Mubarak said that cutting aid to the Palestinian Authority would encourage terrorism.
"The aid is used by the man-in-the-street to buy medicine and to send his children to school. If this money is cut, terrorism will grow and all the (Palestinian) people will suffer," Mubarak told reporters after meeting in Vienna with Austrian President Heinz Fischer, whose country is the current EU president on Monday.
The 25 EU countries had at an informal foreign ministers meeting in Salzburg on Friday said aid could be cut to the Palestinian Authority if the Hamas organization, which won Palestinian elections in January, did not give up violence and recognize Israel's right to exist, according to the Road Map for Middle East peace talks.
"Hamas was elected by the Palestinian people and Israel must recognize that it can form a new government. The renunciation of Hamas of violence and its recognition of preceding engagements (in peace talks) is for a second stage," Mubarak said.
Mubarak was to meet later Monday with Austrian Chancellor Wolfgang Schussel, and then fly to the Vatican, on his way back to Cairo, to meet Pope Benoit XVI as he wraps up a European tour that has already taken him to Italy and Germany.
Mubarak, seen by Europe as a key interlocutor in EU-Arab relations, is the most prominent Arab leader to visit the continent in the wake of recent Muslim anger over the Prophet Muhammad drawings.
Mubarak is accompanied by Egypt's Foreign Minister Ahmed Abul Gheit, Industry Minister Mohammed Rachid and Information Minister Anal el Feki.