Palestinian Finance Minister Salam Fayyad met Tuesday evening with U.S. Secretary of State Condoleezza Rice in Washington. In an interview with the Palestinian daily Al-Hayat, Fayyad said the meeting dealt with his government's demand to lift restrictions placed on banking transactions with the Palestinian Authority.

Fayyad asked the United States to withdraw its policy of a ban on financial transactions with the PA, including those from Arab and European banks.

Fayyad said Rice expressed understanding of his request.

	Advertisement

The Palestinian finance minister described the meeting as very important, adding that the PA needs $1.8 billion for 2007.

He said there is still a delay in the payment of $640 million in salaries for 2006, a sum that amounts to $900 million when considering the funds needed for 2007.

Fayyad met with senior officials in the U.S. Treasury on Tuesday.

He disclosed details of the meeting at a news conference at the Palestine Center a few blocks from the State Department. He said they talked about ways to ease the Palestinians' economic problems including changes in its banking system.

The aim is to regulate and simplify distribution of contributions from around the world.

"Things are evolving in a positive way," he said.

The U.S. and the European Union ruled out direct assistance to the
Palestinian Authority last year after Hamas was elected to a leading role in the government. But humanitarian assistance can go directly to Palestinian projects.

U.S. and European officials also have ruled out meeting with Hamas officials.

Praising Rice's diplomatic efforts, Fayyad said, We are encouraged by effort Secretary Rice has been making to re-engage the parties.

The U.S. and Israel have ruled out negotiating with a Palestinian government that includes Hamas, which they consider a terror organization.

Fayyad, an internationally respected economist, was in Washington primarily to attend the spring meetings of the International Monetary Fund and World Bank, where he once worked.

"Poverty is widespread... Nearly two-thirds of the people in Gaza live below the poverty level" he said, adding that "there is suffering everywhere... the time has come for it to be resolved."

Fayyad also said that the Palestinians were victims of Israeli subjugation, but added: "We do have to begin trying to help ourselves and do not want to assume the role of international beggar."

In responding to questions, Fayyad expressed his commitment to a Palestinian state that lives in peace alongside Israel.

Initially Fayyad met with David Welch, the assistant secretary of state for the Near East. The Palestinian official said Rice had joined the meeting.

Fayyad is a member of the independent Third Way party and met last month with Jacob Walles, the U.S. consul in Jerusalem.