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Palestinian FM Retracts Apparent Reference to Two-State Solution


Palestinian Foreign Minister Mahmoud al-Zahar has retracted an apparent reference to a two-state solution to the Israeli-Palestinian conflict -- wording that may imply recognition of the Jewish state.

Officials with the Islamic militant group Hamas denied Wednesday that al-Zahar made the reference in a letter sent this week to U.N. Secretary-General Kofi Annan.

In the letter, al-Zahar said the Palestinians want to live in freedom "side by side" with their neighbors. Hamas has rejected calls to renounce violence and recognize Israel.

Meanwhile, Palestinian Prime Minister Ismail Haniyeh told the first full Cabinet meeting of his Hamas-led government that the Palestinian treasury is empty.

But Finance Minister Omar Abdel Razek said he hopes to receive 80-million dollars from Saudi Arabia, Kuwait and the United Arab Emirates to help pay the salaries of the Palestinian Authority's 140,000 workers.

Hamas' new government needs to make up for the expected loss of tens of millions of dollars in foreign aid withdrawn by donors because of Hamas' refusal to recognize Israel and to renounce violence.

Additionally, Israel has frozen the monthly transfer of millions of dollars in tax revenues that it collects for the Palestinians. The United States and the European Union classify Hamas as a terrorist group.

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