The EU Commissioner for External Relations, Benita Ferrero-Waldner will visit Palestinian Territories next week for talks with the Palestinian President, Mahmoud Abbas. She will also meet with the Israeli Prime Minister Ehud Olmert and Foreign Minister Tzipi Livni.

A press release by the European Commission said Friday, at the request of the Quartet (EU, US, UN and Russia) Commissioner Ferrero-Waldner has spearheaded efforts to develop proposals for a Temporary International Mechanism to facilitate the direct delivery of assistance to the Palestinian people to meet basic needs, without the money passing to or through the PA government.

"Now that these proposals have won the approval of the Member States of the EU, she looks forward to discussing the new Mechanism with all parties. During her visit, talks will also focus on the current political situation and prospects for a return to dialog leading to a negotiated two-state solution," said the press release.

On the eve of her visit on June 19-20 the Commissioner said: "This is a delicate moment for all parties. There can be no progress on any front without dialog: between Israel and the Palestinian President, and between the Palestinians themselves. That is why we urge early contact between PM Olmert and President Abbas. It is also why we urge the new Palestinian government to unlock the door to a peaceful future by renouncing violence, recognizing Israel and accepting previous obligations and agreements, including the Road Map."

She added: "We Europeans are determined to play our part in preventing a humanitarian crisis in the Palestinian Territories. But there can be no business as usual with a government that has not yet accepted the fundamental principles of peace. It is for this reason that we have worked hard to develop a Mechanism that will meet some basic needs without money passing through the government."

The Mechanism is open to all donors, and could be used by Israel to channel withheld Palestinian tax revenues.

The Mechanism will cover essential supplies to the health sector and payments to health care service providers utilities including fuel and basic needs allowances to meet the essential needs of the poorest segments of the population.

"President Abbas’ office will act as interface for the donor community in the operation of the Mechanism, signing and authorizing all necessary documents," said the press release.

Assistance will be channeled through a three part structure: The Emergency Services Support Program  (ESSP) of the World Bank will be expanded to cover essential supplies in the health sector and basic allowances to those who are providing care in hospitals and clinics. While implementation procedures are being developed, the European Commission will co ordinate with the World Bank in providing immediately and directly allowances to the health care sector employees form the community budget.

The Interim Emergency Relief Contribution (IERC) of the European Commission will be reinforced to ensure uninterrupted supply of essential utilities such as fuel.

A Needs Based Allowance Program will be developed as quickly as possible to create a "social safety net". A fund will be established to make payments direct to individual bank accounts on the basis of need.

Parts one and two of the Mechanism will be launched immediately, with the aim of launching payments to individuals by early July. The aim is to have part three of the Mechanism functioning as soon as possible. All three will operate with strict controls in full accountability and transparency.

Since the new government, headed by Hamas, came to power, the European Union has suspended direct aid to or through the Palestinian Authority. It has, however, expanded its assistance to help meet Palestinian basic needs.

€154 million has been made available since the beginning of 2006, which includes €64 million for the United Nations Relief and Works Agency, €40 million to ensure uninterrupted power supply, and €34 million humanitarian aid. Despite the suspension of direct aid announced earlier in the year, the EU remains the biggest donor to the Palestinians.