As Palestinian lawmakers reach the final stages of their negotiations
for a 'national unity government' that they hope will provide
legitimacy in the world arena and end an economic blockade imposed
against them after their democratic election of the Hamas party in
January, the European Union has agreed to back the Palestinian unity

A statement by the 25 states of the European Union Friday welcomed the agreement made between Palestinian factions to create a unity government.  The chair of the talks, Finnish foreign minister Erkki Tuomioja said the unity government "creates a new situation and allows us to break the deadlock."

The 'deadlock' he is referring to is an international blockade that has been put in place against the democratically-elected Palestinian government by the U.S., Israel and the European Union since March, which has resulted in a massive humanitarian crisis in Gaza and the near-bankruptcy of the Palestinian government.

European diplomats visiting the West Bank indicated that the formation of a unity government could lead to the restoration of foreign aid.

Italian Foreign Minister Massimo D'Alema told Reuters that she believed the formation of the national unity government was "a very important turning point for the situation."

The Palestinian government expressed support for the EU position, with Palestinian government spokesman Ghazi Hamad calling the document "progressive and rational," saying it would contribute toward maintaining stability.

"We hope to open a new chapter between the Palestinian government and the EU and I hope that there will be no retreat under pressure from the United States administration."

The United States has been widely criticized for its uncompromising position on the Palestinian national unity government, a government which has taken months of meticulous and delicate negotiations to achieve.

The latest US statement on the recognition of the Palestinian government did not even mention the fact that a new government is being formed.  "At this point, we don't see any qualitative change in the situation vis-a-vis the Palestinian Authority and its policies," State Department spokesman Sean McCormack said on Thursday.

The US administration has refused to recognize the democratically-elected Palestinian government, despite having been among the most vocal supporters of the democratic elections held in Palestine in January.  When the result of those elections was the unexpected victory of the Hamas party, the US immediately withdrew its support for democracy in Palestine. 

"The US administration does not want the Palestinians to be unified", said Palestinian Prime Minister Ismail Haniyeh on Friday.  "It wants to extort the Palestinian people and the Palestinian government."