Russian Foreign Minister Sergei Lavrov recently criticized the West's denial of financial support to the Hamas government, suggesting that isolation was a blind alley. He called for permanent contacts with the group. Moscow invited the political leadership of Hamas for an open dialogue at the beginning of March, hoping that this would soften Hamas's platform. Russia has also sent an emergency grant of $10-million (U.S.) to the Palestinians. The grant came at a crucial time when the PA was unable to pay salaries to the 165,000 government employees, for the second consecutive month, due to the Israeli government's continued withholding of tax revenues collected on behalf of the PA, and to the suspension of aid by the West.

Recent statements by Hamas leaders suggest that they understand the difference between being in opposition and being in government. Committed to the ceasefire agreed with other Palestinian factions since March 2005, Hamas has sent messages implying acceptance for a two-state solution as the only acceptable way of ending the fierce violence with Israel. At the same time, Hamas has also warned of the likely return to violence if the new government fails to secure the basic needs of Palestinians, including the PA's monthly wages of $120-million, due to the economic embargo imposed by the U.S. administration.

Maintaining the suspension of aid to the Hamas-led government might result in a collapse of the Palestinian Authority, but it will also close a rare window of opportunity to break the cycle of violence in the Middle East. We therefore call on Canada to reconsider its decision to suspend projects with the PA. Opening direct and unconditional dialogue with a government elected in transparent and fair elections is the best way to support democracy and peace building in the Middle East. Canada must reposition itself as an active, effective and balanced player in the region.!Stephen Baranyi is principal researcher at the Ottawa-based North-South Institute, Basel Alashi is governance adviser at the United Nations Development Program, and Khalil Shikaki is director of the Palestinian Centre for Policy and Survey Research.

Differentiating between providing aid to the Palestinian Authority and aid to the people is not helpful either, given the vital role the PA plays as the main service provider in sectors such as education and health. Poverty reached an alarming level of 44 per cent at the end of 2005; this is expected to climb to 67 per cent by end of 2006, according to a recent World Bank report, if the international community does not change its approach.

Suspending aid to the Palestine Authority will only increase the suffering of ordinary Palestinians, the target beneficiaries of the Canadian aid. The decision to restructure projects funded by the Canadian International Development Agency in order to bypass the new government will also result in the weakening of the PA institutions, and will nullify many capacity-building programs that Canada was supporting. Those programs aimed to build the capacities of various PA ministries and municipal institutions to manage large donor-funded projects, and to make them reliable partners in the development process.

When the new Hamas-led government took office in March, Canada announced that it was suspending all direct assistance to the Palestinian Authority (PA) and restructuring projects that could indirectly benefit the PA. The official explanation is that Canada, like the United States and the European Union, will only co-operate with Hamas once it has renounced terrorism, accepted agreements made by the previous authority and recognized the legitimacy of the Israeli state.

This position is profoundly at odds with Canada's commitment to support democracy in the Middle East. Canada sent a mission to observe the second Palestinian legislative elections at the end of January, in which Hamas won 74 out of 132 parliamentary seats freely and fairly, according to most observers. Yet, soon after, it became clear that Ottawa did not accept the outcome of the elections. Canada stood by as U.S. diplomats lobbied Palestinian moderates not to co-operate with the new Hamas administration, reinforcing its image as a radical government.

The West's position will fuel the conflict that Canada wants to see resolved. Over the past three years, the “What Kind of Peace is Possible?” project led by The North-South Institute has examined the dynamics of peace building in six societies. A clear conclusion is that militaristic, exclusionary approaches do not work over the long run. Involving stakeholder representatives in dialogue and peace implementation is crucial, especially when they have been freely elected. One of the case studies, by the Palestinian Center for Survey Research, convincingly argues that Hamas's electoral victory could be a major step toward democratization and peace. It shows how the isolation of Hamas and other radical groups in Palestine, despite their electoral successes, gives them few incentives to moderate their stance and negotiate with Israel. The transformation of militant groups into democratic political parties is a lengthy process. Peace efforts will be futile if the international community continues to exclude Hamas from democratic politics.