Canada, Australia, the United States and the European Union have all announced their intention to boycott the PNA, in an effort to force Hamas to recognize Israel and join the peace process. These governments appear to have few qualms about using aid as a blunt political instrument. They feel that any harm to Palestinians can be mitigated by providing humanitarian aid through the UN and nongovernmental organizations.

This policy is fraught with risk. In the first place, it is certain to increase the pressure on ordinary Palestinians – the exact reverse of what is intended. Sanctions always fall most heavily on the poor, as we saw in Cambodia, the former Yugoslavia, Haiti, and of course in Iraq under Saddam Hussein. The tougher the sanctions, the easier it is for those in power to exploit their monopoly over scarce resources.

The potential for disaster is great in the Palestinian Territories precisely because the PNA is so dependent on external aid, which last year reached $1.1 billion. 80% of this came from the West and although Iran and Qatar have announced pledges of $100 million to the PNA, Arab aid to the Palestinians last year fell to $197 million - half the 2001 level.

After years of pressure from Israel, and inattention from their own government, ordinary Palestinians are in no position to withstand another siege. In 2004 the World Bank found that Palestinians without a connection in the diaspora had exhausted their savings. Another Bank study last December found that even after a year of relative stability, 43% of all Palestinians were living below the poverty line. The withholding of Western aid, combined with renewed Israeli “closure,” could push many over the edge.

Even if the West does step up humanitarian aid, how will the aid be delivered? Donors appear to be counting on relief agencies, starting with the UN Relief and Works Agency (UNRWA). But UNRWA only assists refugees, who account for less than 40% of the Palestinian population. The UN could not undertake a massive relief operation without a huge injection of resources and drastically different mandate.

At some stage donors will have to turn to Palestinian nongovernmental organizations (NGOs) and first sight the NGOs would seem well placed to respond. Many emerged during the Oslo years, as part of a broad plan by Western donors to create an independent civil society that would curb excesses by the PNA. Western aid to NGOs rose from $34 million in 1994 to $120 million in 2002. Donors also pushed through a law that allows NGOs to receive direct funding.

This achieved the donors’ objective. NGOs challenged the PNA repeatedly during the 1990s over independent unions, security courts, and women’s rights. After the intifada erupted in 2001 NGOs took over many essential services from the PNA, particularly in health and education, when those ministries were targeted by Israel.

NGOs performed heroically during the intifada but they have also paid a heavy price. During the Oslo years, their independence was so resented by the PNA that one of their leaders, Eyad Serraj from the Gaza Community Mental Health Program, was detained and tortured by Palestinian security forces. NGOs also lost support among their traditional constituency in the villages, where they were seen as more committed to donor priorities like “transparency” and “accountability” than the national struggle for survival.

Asking NGOs to take on the task of delivering Western aid at this sensitive juncture would cost them more popular support, and be viewed as undermining an elected Hamas government that has been denied the chance to prove itself.

In a larger context, history warns against asking relief agencies to fill a political vacuum, and against throwing humanitarian aid at a political problem. This was the policy that prolonged the war in Bosnia and protected the genocidal Rwandan interahamwe in the refugee camps of Zaire for three years.

Problems of this magnitude require a political solution. Of course the election of Hamas presents an unusually difficult political challenge for Western governments, but they can hardly walk away, given the way they forced democracy on the Palestinians.

The question is how they can engage with the Palestinians. Expecting civil society to do it for them is certainly not the answer. Punishing the entire PNA because of Hamas makes little sense either - particularly for the European Union, which has made a massive investment in the PNA. In spite of the PNA’s reputation for mismanagement, thousands of PNA officials have performed to a very high standard under relentless pressure. It is extraordinary that the EU is prepared to squander its investment so casually.

So how should Western governments react? Since the election, all of the attention has been on the Hamas-controlled central government. But the needs are greatest in Palestinians villages, which have been impoverished by years of unrepresentative leadership, Israeli closure and the exodus of young people. It is here, in the heartland of Palestine, where the humanitarian crisis will be most acute and where the aid should go.

Such a strategy would require donors to interact with municipal governments, but it would also allow them to engage with local officials over the nuts and bolts of village development instead of locking horns with Hamas over the recognition of Israel and Oslo. Right now, no one seem able to compromise on these two “final status” issues. They might find it easier after working together to clear up garbage, end domestic violence and rebuild schools.

A focus on rural development would also open up a natural role for Palestinian civil society, and allow NGOs to reconnect with their grass-roots constituency – without appearing as lackeys of the West.

Iain Guest is Director of the Advocacy Project

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