The European Union Council refused to release funds to the Palestinian Authority until the unity government renounces terrorism and recognizes Israel. The German Press Agency reported that though Hamas and Fatah reached a compromise and created a new Cabinet, the E.U., presided over by German Chancellor Angela Merkel, has rejected appeals by P.A. President
Mahmoud Abbas for the release of funds. The E.U. will continue to release only
those funds dedicated to social projects until the Palestinian government accepts preconditions set by the diplomatic Quartet, which include rejecting violence and recognizing the Jewish state.
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