U.S. open to some contact with Palestinians' Fayyad

By Arshad Mohammed

WASHINGTON (Reuters) - The United States has decided to leave the door open to some contact with the proposed Palestinian finance minister even if the government he plans to join fails to recognise Israel, renounce violence and respect past peace deals, two U.S. officials said on Friday.

The desire to maintain such unofficial contacts with Salam Fayyad represents a shift in approach by the United States, which has been reluctant to deal with members of any Hamas-led government because it views the faction as a terrorist group.

Palestinian President Mahmoud Abbas of Fatah and Prime Minister Ismail Haniyeh of Hamas have agreed to form a unity government that is expected to be sworn in on Saturday and poses a U.S. policy dilemma over how to deal with its non-Hamas members.

The unity government will be headed by Haniyeh, whom the United States refuses to deal with, but it will include Fayyad, a Western-backed economist highly respected by the Bush administration, in the key post of finance minister.

Palestinians hope that the unity government may produce some softening in a Western aid boycott against the current Hamas-led government.

The United States has adopted a wait-and-see attitude towards the new government, hoping it may accept the three international conditions of recognising Israel, renouncing violence and abiding by past peace deals. If it does not, Washington is expected to boycott the government.

One U.S. official, who asked not to be named because of the sensitivity of the matter, said Washington would not deal with Fayyad in his official capacity as finance minister but had decided to leave the door open to unofficial contacts.

He also said the United States would not view Fayyad as a terrorist if he joins the unity government as planned.  Continued...