The European Parliament,

–  having regard to its previous resolutions on the situation in the Middle East and in particular those of 23 October 2003(1), 27 January 2005(2) on the presidential election, and 2 February 2006 on the outcome of the legislative elections in Palestine,

–   having regard to UN Security Council Resolutions Nos 242, 338, 1373 and 1397,

–  having regard to the Quartet's 'Roadmap for Peace' of 30 April 2003,

–  having regard to the results of the 25 January 2006 elections to the Palestine Legislative Council (PLC),

–  having regard to the results of the 28 March 2006 national elections in Israel,

–   having regard to the EU Presidency statement on the PLC elections,

–   having regard to the declaration on the PLC elections of 28 December 2005,

–   having regard to the Neighbourhood Agreements between the EU and Israel and the EU and Palestine,

–   having regard to the statement of the Quartet Principals on 9 May in New York,

–  having regard to the conclusions of the External Relations Council of 15 May 2006,

–   having regard to Rule 103(2) of its Rules of Procedure,

A.  whereas the Middle East Quartet for Peace has expressed its willingness to establish a temporary international financial mechanism, without going through the Palestinian government, the objective of which is direct delivery and supervision of assistance to the Palestinian people,

B.  whereas the EU is working urgently to develop such a mechanism, which as a matter of priority will be aimed at contributing to meeting basic needs including health services and includes consultation of international financial institutions and other key partners, and invites other donors to actively join in the effort to establish this mechanism as soon as possible,

C.  whereas after Hamas came to power, Israel suspended payment of money in taxes and other customs duties it had collected on behalf of the Palestinian Authority,

D.  having regard to the changes recently agreed by the Quartet on the funding policy for Palestine, in particular its support for the European proposal to implement a temporary international mechanism for providing direct aid to the Palestinian people,

1.  Expresses its serious concern about the deterioration of the humanitarian, economic and financial situation in the West Bank and Gaza;

2.  Endorses the Council's decision to develop a temporary international mechanism for direct aid to the Palestinian people, on behalf of the Quartet and so as to avoid a major humanitarian crisis in the Palestinian territories; however, asks the Commission to ensure, in the negotiations it is leading, the transparency of the mechanism, in order to prevent any fraud or deviation of the funds, as well as ensuring the visibility of the aid, the needs it will cover and the way it will be deployed, as elements to which the European Parliament will pay special attention before giving, as one of the two arms of the budgetary authority, its approval to any unblocking of financial assistance;

3.  Welcomes the Israeli government's decision to resume payment of some of the taxes and other customs duties it collects on behalf of the Palestinian Authority, through the provisional international mechanism which the Quartet charged the EU with devising;

4.  Welcomes the first meeting since the Israeli elections between the President of the Palestinian Authority, Mr. Mahmoud Abbas, and the Israeli Vice-Prime Minister, Shimon Peres, on 20 May in Sharm-el-Sheikh, which constitutes an encouraging sign, paving the way for the planned meeting between Mr Abbas and the Israeli Prime Minister Ehud Olmert, and hopes that these contacts will eventually lead to the resumption of peace negotiations pushing forward the long-stalled peace process;

5.  Reaffirms that its commitment to remain an important aid donor to the Palestinian National Authority and to continue assisting Palestinian economic development and Palestine's democratic process will be pending on the government's clarification on denouncing violence and recognising Israel; also reaffirms its determination to work for peace and to cooperate with any government which is ready to work by peaceful means;

6.  Reiterates that all future assistance will be reviewed in the light of the Palestinian government's respect for these principles;

7.  Is shocked by the statement by Hamas which considered a suicide bomb attack against civilians in Israel as an 'act of self-defence'; strongly condemns not only any terrorist action but also all statements which by justifying violence are a further instigation to perpetrate it;

8.  Reiterates its call on the Hamas-led government to publicly renounce violence, recognise the right of existence of Israel and fully respect international law, if it is to maintain ties with Europe; reiterates its conviction that there is no place in politics for groups or individuals who advocate violence, and urges all factions to disarm;

9.  Considers that any contact with the newly-appointed Palestinian government should aim to achieve recognition of the final peace agreement, on the basis of a solution involving two viable states and the renunciation of violence by the government itself and the groups supporting it;

10.   Reiterates its condemnation of and calls for an immediate halt to the continuing extension of settlements, in particular in East Jerusalem, and the building of the wall beyond the 1967 borders; this perpetration of an unacceptable collective punishment of the Palestinian people is not only contrary to international law but is also an obstacle to the restoration of a climate of dialogue;

11.  Declares once again, at this particular stage, that a solution to the Middle East conflict is only possible through the negotiation of a firm and final peace agreement as set out in the Roadmap, which is still valid, without prior conditions, based on the existence of two democratic, sovereign and viable states, living peacefully side by side within secure and recognised borders;

12.  Instructs its President to forward this resolution to the Council, the Commission, the Palestinian Authority and the Palestinian Legislative Council, the new Israeli Government and Knesset, the US Administration, the Government of the Russian Federation, and the UN Secretary-General.

(1) OJ C 82 E, 1.4.2004, p. 610. (2) OJ C 253 E, 13.10.2005, p. 35.