EU to back Palestinian unity government

European Union foreign ministers agreed on Friday to back a Palestinian national unity government being formed by President Mahmoud Abbas with the Hamas Islamist movement, despite US misgivings.

"We agreed that we have to support the new Palestinian government. It's a very important turning point for the situation," Italian Foreign Minister Massimo D'Alema told Reuters.

"(EU foreign policy chief) Javier Solana told us in the platform there will be recognition by the new government of the treaty signed by the Palestinian Authority in the past - it means recognize Israel as a partner," D'Alema said.

The EU and the United States have boycotted the Hamas-led government formed in March because it refused to recognise Israel, renounce violence and accept past peace accords.

Washington said on Thursday it saw no grounds so far to lift the embargo on contacts and aid.

But many European governments are anxious to end the stand-off, which has contributed to aggravated poverty and lawlessness in the Palestinian territories.

"We have a new Palestinian government. We have a new situation, and we should use it to get back to the peace process," Finnish Foreign Minister Erkki Tuomioja, chairing the meeting of 25 EU ministers, told reporters on arrival.

D'Alema did not say whether the EU would resume contacts and financial assistance once the new government was in place.

Slovenian Foreign Minister Dimitrij Rupel told reporters: "We are happy about the government of national unity. We are now trying to help it, also financially."

But British Europe Minister Geoff Hoon said: "We haven't reached that position yet. There is still some further clarification (needed) as to precisely what is the underlying agreement involving Hamas."

US opposes shift

Asked on Thursday about signs of a shift in EU policy, US State Department spokesman Sean McCormack said there had been no change that would justify lifting the West's embargo.

"At this point, we don't see any qualitative change in this situation vis-a-vis the Palestinian Authority and its policies and therefore ... we would expect that the status quo as it stands should be unchanged," he told a briefing in Washington.

EU External Relations Commissioner Benita Ferrero-Waldner said the EU should show flexibility, provided the new government's platform "reflected" the demands of the Quartet - the EU, the United States, Russia and the United Nations.

"It is clear we want to be firm on principles, but we should be flexible about the form this government chooses in the text," she said, adding that there were some encouraging signs.

Ferrero-Waldner said that as far as the EU knew, the interior, finance and external relations ministers of the new government might not be Hamas members.

"We have to face it with an open mind and we should accompany this process that might go in the right direction."

Even if the new platform was excellent it would be some time before direct support could be resumed, she said.

In the meantime, EU ministers approved a three-month extension of a temporary aid mechanism set up this year to channel essential aid to Palestinians while bypassing Hamas.

After talks with Abbas in Ramallah on Thursday, French Foreign Minister Philippe Douste-Blazy raised the prospect of a policy shift if the new government "takes into consideration" the Quartet's conditions.

But not all European governments were convinced. Britain, Germany, the Netherlands and the Czech Republic - all close to Washington - urged caution, diplomats said.

Asked about prospects that a unity government would meet the international community's conditions for talks, Dutch Foreign Minister Ben Bot said: "So far not very positive, I must say."