washington | The fate of the Palestinian Authority and the dilemma of how to circumvent the terrorists that lead it was high on the Israeli and U.S. agendas as world leaders convened in New York this week for the opening session of the U.N. General Assembly.

European enthusiasm for Palestinian efforts to forge a national unity government, and a U.S. Congress mired in a campaign season, signal cracks in the wall of support Israel has enjoyed for the policy of cutting off Hamas.

President Bush included his vision for the Palestinians in his speech Tuesday, Sept. 19, to the General Assembly. Mahmoud Abbas, the relatively moderate Palestinian president, was also in New York touting a possible national unity government with Hamas and seeking international aid.

In his speech, Bush said he directed Secretary of State Condoleezza Rice to “lead a diplomatic effort to engage moderate leaders across the region, help the Palestinians reform their security services, and support Israeli and Palestinian leaders in their efforts to come together to resolve their differences.”

British Prime Minister Tony Blair “has indicated that his country will work with partners in Europe to help strengthen the governing institutions of the Palestinian administration,” Bush said. “Countries like Saudi Arabia, Jordan and Egypt have made clear they are willing to contribute the diplomatic and financial assistance necessary to help these efforts succeed.”

Bush’s proposals were considered this week by the Quartet, which released a statement on the issue Wednesday, Sept. 20. The statement welcomed the Palestinian efforts to form a national unity government; called on Israel to turn over more than $500 million in tax and customs revenue; and agreed to extend and expand funding to the Palestinians, while continuing to bypass the Hamas-led Palestinian Authority.

Administration officials made it clear to Israel’s foreign minister, Tzipi Livni, that consideration of the Palestinian issue was inevitable at the U.N., no matter how pressing Israel considers the threat from Iran and Hezbollah.

Livni met last week with Bush and other top officials in Washington. She emerged from her talks with Rice with a dual message: Israel wants to help Abbas raise his profile, but not at the expense of funding Hamas, as long as Hamas continues to reject Israel’s existence and embraces terrorism.

“This is a moment in time in which Mahmoud Abbas has to decide whether the Palestinian Authority will operate on his terms or on the terrorists’ terms,” Livni said. She repeatedly stressed that the problem is not Hamas per se but its platform.

Bush administration officials echoed that line.

“We support voices of moderation,” Stephen Hadley, Bush’s national security adviser, said Monday, Sept. 18 in a pre-G.A. briefing with reporters. “Obviously, President Abbas is one. He’s committed to peace, and we have worked with him and would continue to work with him. That’s why the president is going to see him. The big question, of course, is whether Hamas will renounce violence, accept the existence of Israel and accept the agreements that have been made.”

After their meeting in New York this week, Bush praised Abbas for his attempts to reduce the Israeli-Palestinian conflict. “I can’t thank you enough for the courage you have shown,” Bush said.

For his part, Abbas used the opportunity to emphasize his need for aid.

Another question is whether Hamas will really need to change at all. European leaders say they’re steadfast in denying the Palestinian Authority money until Hamas accepts Israel’s right to exist and renounces terrorism, but their eager embrace of Abbas’ plans for national unity suggests that their resolve could be weakening.

The Europeans are increasingly concerned by reports of a Gaza on the verge of anarchy, the result of nonpayment of salaries by the Palestinian Authority government, by far the largest employer in the Palestinian areas.

Tough measures in Congress that would severely limit U.S. assistance to the Palestinian Authority and to nongovernmental organizations that help the Palestinians are languishing because of differences between a Senate bill and its counterpart in the House of Representatives. The Senate version has an exemption for Abbas and allows Bush greater flexibility in bypassing the ban on funds.

The Conference of Presidents of Major American Jewish Organizations is using the General Assembly to urge Quartet members to closely examine the conditions for any Palestinian unity government.

“We are deeply concerned by reports that the European Union is reconsidering its commitment to the Quartet’s conditions,” the Presidents Conference said in a statement. “Appeasement will only vindicate Hamas’ intransigence and signal to the Palestinians, and to the wider Arab world, that they can reject Israel, continue the terror and still receive European funds.”

The European Jewish Congress is also pressing the case. In a meeting with Finnish Prime Minister Matti Vanhanen on Tuesday, EJC President Pierre Besnainou said that if a new Palestinian national unity government is formed, it must also secure the release of abducted Israeli soldier Cpl. Gilad Shalit.

Hamas is hoping that the Europeans — who used to be the Palestinian Authority’s main funder before Hamas took power — would resume funding.

However, E.U. officials said they would need three months to “reflect” on a new Palestinian Authority government’s positions before determining whether to resume aid to the Authority, much of which has been rechanneled to humanitarian organizations.

“If you think there is tension between the U.S. and the European Union on resuming funding, you are quite wrong,” said a German diplomat who has been present at U.S.-E.U. discussions and who spoke on background. “In this case there might be nuances, but the E.U. and the U.S. will speak with one voice through the Quartet and their demands will be the same, even if the language sounds different.”

Yet crucial differences could emerge over what constitutes recognition of Israel, a key requirement for resumption of funding. In the past, Palestinians have sought vague formulas that stop short of recognizing Israel, while outside observers have sought to divine in them some unstated acknowledgment of Israel’s right to exist.

“I think the E.U. is looking for the implicit, not just the explicit. And if the unity government stands by all peace agreements, that’s an implied recognition of Israel,’ said a source familiar with E.U. declarations on the Middle East.

The United States has been firmer in insisting that if the Palestinians really do accept Israel, they must state it plainly and not obfuscate with formulas that can mean different things to different people. n

JTA correspondent Dinah Spritzer in Prague contributed to this report.