RAMALLAH, West Bank - An emboldened Palestinian President Mahmoud Abbas told President Bush on Monday that now is the time to renew Mideast peace talks, as the emergency government he installed reaped its first windfall when Europe promised to restore crucial aid.
Days after Hamas' violent takeover of Gaza, the Islamic militants and Abbas' Fatah are headed in vastly different directions. While Hamas faces deepening isolation, Abbas has received an outpouring of international support.
Bush lent critical support in a phone call to Abbas, who replaced the Hamas-led Palestinian government after the group seized Gaza. The U.S. prepared to lift its sanctions on the Palestinian government now that it no longer includes Hamas.
Russia also said it supported Abbas' move to form an emergency government, but urged him and Islamic Hamas to seek a "wide-ranging dialogue."
The EU traditionally has been the Palestinian Authority's largest donor, and the reinstatement of hundreds of millions of dollars in aid, cut off after Hamas took power 15 months ago, could signal the beginning of the end to a crippling international boycott.
Abbas hurriedly swore in the new Cabinet on Sunday, days after dissolving a unity government between his Fatah movement and Hamas.
The rift has left the Palestinians with two governments -- a Fatah-allied government in the West Bank and the Hamas leadership in Gaza. Abbas seeks peace with Israel, whereas Hamas, which killed hundreds of Israelis in suicide bombings, is sworn to the Jewish state's destruction.
The dispute has endangered the Palestinians' goal of forming an independent state in the two territories, which are located on opposite sides of Israel.
The international community has largely rallied behind the Abbas government, led by Prime Minister Salam Fayyad, an internationally respected economist.
In a major boost to Abbas, EU foreign policy chief Javier Solana announced in Luxembourg on Monday that the 27-nation bloc would resume direct financial aid to the Palestinian Authority now that Hamas is no longer part of the government.
"We absolutely have to back" the new government in the West Bank, said Luxembourg Foreign Minister Jean Asselborn. "The question of today is: How can we help the 1.4 million people in Gaza?"
Riyad al-Malki, the new Palestinian minister of information and justice, welcomed the announcement.
"There are encouraging steps. We hope that these steps will be carried out quickly," he said.
Both the Haniyeh and Fayyad governments profess to represent Palestinians in both the West Bank and Gaza. To drive home that point, al-Malki said the EU aid would also go to pay salaries for government employees in Gaza.
The United States, another major donor to the Palestinians, has said it would end its financial embargo, while Israel has said it would consider unlocking $550 million in customs duties it has withheld from the Palestinians since Hamas took power.
The White House said Bush called Abbas on Monday "to express support for him and the Palestinian moderates."
Abbas told Bush that "this is the time to resume the political negotiations and to revive the hope of the Palestinian people," Abbas spokesman Nabil Abu Rdeneh said.
The two men spoke a day before Bush is to meet with Israeli Prime Minister Ehud Olmert in Washington. On Sunday, Olmert said his country would be a "genuine partner" of the new Palestinian government.
The top U.S. diplomat in Jerusalem, Jacob Walles, met with Fayyad in Ramallah on Monday and told reporters the U.S. "will have a normal relationship with this government."
He said he and Fayyad "discussed the need to address the humanitarian situation in Gaza and make sure the people of Gaza don't suffer."
The Russian Foreign Ministry said it hoped the Cabinet would "normalize" the situation and restore humanitarian aid supplies.
The ministry said Moscow expects that "the new emergency Cabinet of the Palestinian National Authority will take all necessary actions for the normalization of the situation, improving the humanitarian situation in the Palestinian territories and most importantly, halting the inter-Palestinian conflict.
"This requires the establishment of a wide-ranging dialogue between all Palestinian political forces, including Hamas," the ministry said.
The stark division between Gaza and the West Bank since Hamas' lightning takeover of Gaza has raised fears about a possible humanitarian crisis in Gaza. Both Israel and Egypt have sealed off the area's borders.
In Gaza, panicked residents stocked up on basic supplies over the weekend, fearing shortages of food, fuel and other staples. But the run on markets had subsided by Monday, with Gazans reassured by Israeli assurances that humanitarian aid would go through.
Fears were alleviated in part after the sole provider of gasoline to Gaza, Israeli company Dor Alon, renewed shipments cut off last week during the heavy fighting.
Israeli Foreign Ministry spokesman Mark Regev said Israel was aware of the humanitarian dangers facing the Gaza Strip. But he said Israel had not yet figured out a way to deal with the Hamas rulers of Gaza.
Hamas routed the poorly disciplined, squabbling Fatah in Gaza despite being heavily outnumbered. On Sunday, Abbas formed a committee Sunday to investigate the Fatah collapse, aides to the Palestinian leader said.
Abbas also dissolved the months-old Palestinian National Security Council on Monday, then reconstituted it without Hamas representation in a further bid to weaken the Islamic group.
About 300 Gazans remained trapped at the Erez border crossing with Israel, hoping to escape Hamas rule, Israeli officials said.
Israel said it was only letting the staff of international organizations, people with special permission and humanitarian cases to cross. It said it would allow the Red Cross to ship first aid kits into Gaza on Monday,
"We believe these 300 are not in danger and they can go home," military spokesman Shlomo Dror said Monday. "Some of them are Fatah, but Hamas is not killing all the people from Fatah. It is only trying to catch people who are very dangerous."
The Interfax news agency reported that Russia would evacuate 120 nationals -- mostly Russian women married to Palestinians -- from the Gaza Strip. The evacuation will begin when Israel reopens the Erez crossing, Russian envoy Alexei Pogodin was quoted as saying.
Foreign Minister Sergey Lavrov discussed the issue of evacuating Russian nationals with his Israeli counterpart, Tzipi Livni, by telephone. The two "stressed the importance of concerted efforts to prevent the deepening of the humanitarian crisis," the ministry said.
