Prime Minister Ehud Olmert met Sunday in New York with United Nations Secretary-General Ban Ki-moon, who urged Israel to show restraint in the wake of Hamas' violent takeover of the Gaza Strip last week.

Ban, speaking to reporters after the two leaders met at the home of Israeli ambassador to the UN Dan Gillerman, said, "I call on all parties to exercise restraint."

He said the United Nations has "broad humanitarian concerns" in Gaza that "we need to overcome with wisdom."

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Earlier, en route to the United States, Olmert said he saw "an opportunity that has not existed for a long time" now that Palestinian Authority Chairman Mahmoud Abbas had dissolved his unity government with Hamas following the Islamists' rout of Fatah forces in the Gaza Strip.

"A government that is not a Hamas government is a partner," he told reporters on his plane, referring to the cabinet of political independents Abbas has formed.

Olmert and Ban also discussed the Katyusha rocket attack on Kiryat Shmona earlier in the day, which according to the prime minister was apparently carried out by "a small Palestinian movement."

UNRWA projects $200 million deficit this year
The UN agency aiding Palestinian refugees faces a $200 million deficit this year, its commissioner general said Sunday, calling for immediate international assistance.

The UNRWA agency has provided aid to Palestinian refugees since its establishment in 1948 following the Arab-Israeli war that same year.

"The international community must re-engage with the Palestinian people,"
UNRWA's Commissioner-General Karen Koning AbuZayd said. "I make this call with the utmost urgency, for the sake of peace and saving human lives."

The agency's director for the Gaza Strip, John Ging, warned that ordinary Gazans are very apprehensive that once again, it is they who will pay a heavy humanitarian price for the political fallout yet to come.

On Friday, UNRWA said it would restore its operations in Gaza to full capacity, days after scaling back activities due to fierce fighting between Hamas and Fatah in the area.

The agency offers assistance and emergency aid to more than three-quarters of Gaza's 1.4 million population.

Ging blamed the international community for contributing to Gaza's worsening violence. "The tragedy in Gaza is compounded by the fact that it was the easily foreseeable result of a failure to deal effectively with the situation," Ging said.

"This situation could have benefited from evenhanded engagement by the
international community," he said, appearing to refer to the international sanctions on Hamas because it refuses to recognize Israel.

Ging and AbuZayd were addressing the opening of a two-day meeting of UNRWA's donors and of nations hosting the estimated 4 million Palestinians living in refugee camps across the West Bank, the Gaza Strip, Jordan, Syria and Lebanon.

AbuZayd outlined the difficulties faced by UNRWA workers while providing education, health care, social services and emergency aid services to Palestinians in conflict zones like Lebanon and Gaza. She said that at least three UNRWA workers have been killed in fighting in these two areas in recent weeks.

In the West Bank, she said Israeli checkpoints, roadblocks, settlement growth and separation fence severely impair access by refugees to services.

She said that drafting a budget for the cash-strapped agency has become difficult in the face of regional emergencies.

"This year, UNRWA projects a funding gap of over $200 million for both its general operating fund and its emergency operations," AbuZayd said.

She did not spell out how she intended to finance this deficit, but was expected to appeal for donors to increase funding this year.