Empresas y finanzas

Obama urges Israel to help loosen aid flow to Gaza

By Matt Spetalnick

WASHINGTON (Reuters) - President Barack Obama urged Israel on Wednesday to help ease restrictions on the flow of humanitarian aid to Gaza following a deadly flotilla raid, and pledged $400 million (275 million pounds) in assistance to the Palestinians.

Hosting Palestinian President Mahmoud Abbas at the White House, Obama described the situation in the Israeli-blockaded Gaza Strip as "unsustainable" and called on the Jewish state to work with all parties to find a solution.

But Obama, sticking to a cautious line, stopped short of joining in broader international condemnation of close U.S. ally Israel over last week's flotilla incident and did not back Abbas's demand for a lifting of the Gaza blockade.

"The status quo that we have is one that's inherently unstable," Obama told reporters with Abbas at his side in the Oval Office.

Obama also called on Israel and the Palestinians to do more to advance U.S.-mediated indirect peace talks as he sought to contain the fallout from the flotilla incident.

Abbas's visit came amid an international backlash against Israel after its forces boarded a Turkish aid ship bound for the Hamas-controlled Gaza Strip on May 31. Nine pro-Palestinian activists were killed.

The Palestinian leader urged Obama, who has been more measured in his response to the flotilla raid than the broader international community, to take a tougher line with Israel.

"We see the need to lift the Israeli siege of the Palestinian people," Abbas said.

Obama voiced sympathy for the plight of Palestinians in impoverished Gaza but insisted that any solution must also meet Israel's security needs. Israel says its three-year-old blockade is required to stop weapons smuggling to Hamas. Palestinians call it collective punishment.

"There should be ways of focussing narrowly on arms shipments, rather than focussing in a blanket way on stopping everything and then, in a piecemeal way, allowing things into Gaza," Obama insisted, saying his administration had begun some "hard-headed" discussions with Israel on the issue.

AID PLEDGE

There was no sign of a breakthrough in Abbas's talks with Obama, but the U.S. president did not send his Palestinian counterpart home empty-handed. Obama announced $400 million in new economic development aid for the West Bank and Gaza.

Any fresh infusion of funds to Gaza would come with strings attached to keep it out of the hands of Hamas, which is on the U.S. list of terrorist organizations. Hamas Islamists seized control of the coastal enclave from Abbas's Fatah-dominated Palestinian Authority in 2007.

In recent years, U.S. aid to the Palestinians has been sent mostly to the West Bank, where Abbas governs, or funneled to Gaza through international agencies.

Signalling a U.S. desire to boost Abbas's standing with his people, reporters were allowed into the Oval Office to see the leaders together. Press coverage was barred during a tense visit in November by Israeli Prime Minister Benjamin Netanyahu, which Israeli media widely interpreted as a snub.

Obama reiterated his support for a "credible" investigation of the flotilla incident, saying it was important to "get the facts out." But he steered clear of calls for an independent international probe. Israel has insisted on conducting its own inquiry, with a role for foreign experts or observers.

Despite heightened regional tensions, the Obama administration is seeking to keep alive indirect U.S.-brokered talks that have made little headway since starting in early May. Obama hopes to push the sides towards direct negotiations.

Obama's Middle East diplomacy, central to his outreach to the Muslim world, has been complicated by the flotilla incident.

Abbas's meeting with Obama took place a week after Netanyahu cancelled talks in Washington and rushed home from Canada to deal with the crisis sparked by the flotilla raid.

Netanyahu's visit had been billed as a fence-mending session to move beyond discord over Jewish settlement construction on occupied land.

Obama has little room to manoeuvre. With U.S. congressional elections looming in November, he must be mindful that support for Israel is strong among U.S. lawmakers and voters.

Abbas arrived from Turkey, a U.S. ally that has condemned Israel's action and curtailed ties with it. Abbas has called the raid a "massacre." Israel said its commandos defended themselves when attacked during the boarding.

(Additional reporting by Mohammed Assadi in Jerusalem, Editing by Paul Simao)

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