The Bush administration endorsed a European proposal on Tuesday to increase aid to the Palestinian territories, including money that could pay the salaries of some civil servants working for the Palestinian government.

The U.S. administration was opposed to sending any fund by anybody to the Palestinian people as long as Hamas, who formed the government after winning the Parliamentary elections in January, refuses to recognize Israel. 
The Europeans have been searching for a way to increase aid while getting around the Hamas government. Although the plan is still being formed, the idea is to have the money go through a new financial entity, possibly some kind of international organization, for the time being.
The EU said the plan was a response to mounting anxiety that a cutoff in aid since the election of a Hamas-led government in the West Bank and Gaza has led to critical shortages of food, medicine and other basic needs. The shortages could also create a humanitarian crisis in addition to riots and instability.
The goal, said Benita Ferrero-Waldner, external relations commissioner of the European Union, is to "distribute aid to the Palestinian people without going through the Palestinian government."
A major part of the crisis in the West Bank and Gaza Strip, is that salaries for some 165,000 government employees have not been paid for the two months of March and April.
However, European officials said Tuesday that in some cases, the aid could pay for salaries of teachers, nurses and doctors now on the Palestinian payroll.
The Bush administration did not endorse the plan in a separate statement. Instead it signed on to a declaration issued Tuesday by the quartet, consisting of the United States, Russia, the European Union and the United Nations.
The declaration endorsed "a temporary international mechanism that is limited in scope and duration of three months.
Javier Solana, senior foreign policy envoy of the European Union, said it could be used to raise money for salaries of teachers and health care workers. A senior State Department official said that was possible, but the United States reserved the right to review or oppose any future arrangement.
Israel, on the other hand, is still keeping hold of money dues monthly to the Palestinian Authority from the tax revenue.  This money is approximately 56 millions per month.
Palestinian Prime Minister Ismail Haniyeh of Hamas signaled suspicion on Wednesday to a new Quartet plan.
Haniyeh spoke hours after members of Quartet members, meeting at the United Nations in New York.
The Quartet reached a "silent agreement" to establish a trust fund that will pay the salaries of Palestinian civil servants through the office of Palestinian President Mahmoud Abbas.
However, Haniyeh told reporters in Gaza, "The Quartet have conditions. They aim to push the Palestinian government to make concessions that harm Palestinian rights and red lines and give the occupation legitimacy."
In addition, European officials, speaking anonymously because they were not authorized to discuss the statement, said it was also possible that Israel would be encouraged to place some of the tax money it collects for the Palestinians into the new financing mechanism. Since the Hamas government was installed, Israel has refused to hand over the tax revenues.