P.A. Prime Minister Salam Fayyad addresses a news conference in Ramallah on Thursday, April 14, 2011. (AP Photo/Majdi Mohammed)

(CNSNews.com) – Palestinian Authority chairman Mahmoud Abbas’ Fatah faction has agreed to form a unity government with Hamas that excludes Prime Minister Salam Fayyad, a U.S.-trained economist who has won praise from Western governments but is opposed by the terrorist group that controls Gaza.
The decision will turn attention back to the issue of U.S. funding for a government that includes members of a group designated as a foreign terrorist organization under U.S. law.
When the rival factions first signed a reconciliation deal last May, Obama administration officials said it would wait to see the makeup and policies of the unity government that resulted before determining whether there would be implications for U.S. funding.
Up to now, the administration has held to longstanding U.S. policy that if Hamas wants a political role it must meet criteria established by the Mideast “Quartet” – the U.S., Russia, European Union and U.N. – which says it must recognize Israel’s right to exist, renounce violence, and adhere to previous agreements signed between Israeli and P.A. leaders.

Those criteria are also contained in a U.S. law, the 2006 Palestinian Anti-Terrorism Act, which makes federal assistance to the P.A. conditional on its compliance with obligations to renounce and combat violence, recognize Israel’s right to exist, and abide by existing agreements.

The top Republican and Democrat on the U.S. House Appropriations subcommittee dealing with foreign aid, Reps. Kay Granger (Tex.) and Nita Lowey (N.Y.), warned Abbas in writing earlier this year that forming a government with Hamas “threaten[s] the provision of United States’ assistance and support.”
The administration has requested around $550 million in bilateral assistance to the P.A. for fiscal year 2012.
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