JERUSALEM -- Israel is considering handing over millions of dollars in withheld Palestinian tax funds to President Mahmoud Abbas in a move that could bolster him in the run-up to elections over his Hamas rivals, sources said on Wednesday.
Western diplomats and Palestinian sources, who spoke on condition of anonymity, said the proposal under consideration calls for releasing the tax money to Abbas in stages with assurances that it will bypass the Hamas-led government.
That could allow the moderate president to make payments to Palestinian civil servants, who have not received their full salaries since Hamas came to power in March.
Abbas's call for new elections has triggered fierce fighting in Gaza between Abbas's forces and those loyal to Hamas.
On Wednesday, the rivals withdrew their forces from the streets after a fresh ceasefire aimed at halting a slide to civil war took effect.
Ten Palestinians have been killed in Gaza since Abbas called on Saturday for early elections to break a political deadlock with Hamas and get Western sanctions lifted.
Palestinian sources said they expected Abbas would hold long-awaited talks with Israeli Prime Minister Ehud Olmert in the coming days. Olmert told reporters the meeting would be "very soon" but gave no date.
If a final decision is made to release the withheld tax funds to Abbas, one source said, "not all the money would go at once."
Olmert's office declined to comment on the tax revenues, which Israel collects on the Palestinians' behalf.
"We have not been officially informed. We don't know how much the sum would be," said top Abbas aide Rafiq Husseini.
Israel has been under pressure from Europe and the United Nations for months to release the tax money - now estimated at nearly $500 million - to Abbas, who favors peace talks with the Jewish state.
Israel refuses to deal with the Hamas Islamist movement, which formally seeks the Jewish state's destruction.
The expected Abbas-Olmert meeting would be the first formal talks between the two leaders since Olmert took over as prime minister in January.
A senior aide to Abbas said the president planned to issue a decree next week to lay the legal foundations for fresh parliamentary and presidential elections, which Hamas has described as a "coup" and unconstitutional.
Hamas, which trounced Abbas's once dominant Fatah in parliamentary elections last January, has said it would boycott any new polls. No date has been announced.
Topic: Israel May Release Tax Funds to Abbas (Read 2441 times)