It was unclear whether the program would be supported by Hamas, which until now has resisted international demands to renounce violence, recognize Israel and accept peace agreements.

Israel stopped transferring about $55 million in tax and customs revenues it collects monthly on behalf of the Palestinians shortly after Hamas militants won January parliamentary elections.

The withholding of those funds, coupled with a cutoff in aid from Washington and the European Union, has left the Hamas government broke and unable for the past two months to pay salaries to its workers.

People's savings are rapidly dwindling, merchants are forced to buy and sell on credit, gas stations have no fuel to pump and schoolteachers have started striking for back wages.

International aid workers and government officials say the Palestinian health care system is verging on disaster and that sanitation and sewage systems are liable to crash if money is not found soon.

International Mideast negotiators, worried by the reports, agreed at a meeting Tuesday in New York to release humanitarian aid to the Palestinians and to set up a special fund to administer the transfer.

With the West softening its stance, Israel followed suit. On Wednesday, Foreign Minister Tzipi Livni told Channel 10 TV that Israel, too, was willing to release withheld tax and customs revenues "for humanitarian needs such as medicines and health needs."

Livni said Israel would not agree to let the funds be used to pay salaries of Palestinian government employees. Israel has not decided how much money would be released, or when, officials said.

Israel's dovish new defense minister, Amir Peretz, was considering easing restrictions on the passage of goods between Israel and Gaza, as international mediators urged Tuesday.

Israel has kept the main Karni cargo crossing closed for much of the year. The Israeli military cites security concerns, but Palestinians say they are being penalized for electing Hamas as their rulers.

Outside UN headquarters in Gaza City, about 40 schoolchildren set up a tent to protest the economic siege. Several stripped to their underclothes and stood on U.S. and Israeli flags to dramatize the destitution taking hold across Palestinian areas.

"The world should act to end this collective punishment," the protest organizer, Raouf Barbakh, said.

The Hamas-Fatah document, formulated by senior members who are imprisoned by Israel, was presented to Mahmoud Abbas, the Palestinian president, Wednesday.

Abbas, the moderate leader of Fatah, said he backed the draft, which also authorizes him to lead peace talks with Israel. "I adopt the position of those heroes," he said, referring to the prisoners.

Senior Hamas officials were not immediately available for comment.

A Hamas legislator, Salah Bardawil, said that he had not seen the document, but that the views of the Hamas prisoners were considered important.

International aid workers and government officials say the Palestinian healthcare system is verging on disaster, and that sanitation and sewage systems are liable to crash if money is not found soon.

International Middle East negotiators, worried by the reports, agreed at a meeting on Tuesday in New York to release humanitarian aid to the Palestinians and to set up a special fund to administer the transfer.

Israel worries that easing the pressure on Hamas, which is sworn to Israel's destruction, would be counterproductive to Western efforts to force it to renounce violence and recognise Israel's right to exist.

But with the West softening its stance, Israel followed suit. Yesterday, Israeli Foreign Minister Tzipi Livni told Channel 10 TV that Israel, too, was willing to have withheld tax and customs revenues used "for humanitarian needs such as medicines and health needs".

Livni said Israel would not agree to use the funds to pay salaries of Palestinian government employees. Officials said the sums of money, and when it would be released, must still be decided.

Separately, talks to resolve the Palestinian fuel shortage were under way today with the sole provider of fuel to the Palestinians, Israel's Dor Energy, and Israeli authorities, said Mujahid Salame, head of the Palestinian fuel authority.

Filling stations dried up after Dor suspended deliveries to the Palestinians earlier this week because of unpaid bills. Speaking to Voice of Palestine radio, Salame said he expected an agreement soon.

Israel's dovish defence minister, meanwhile, is considering easing restrictions on the passage of goods between Israel and Gaza, in keeping with a call from the international mediators at the meeting on Tuesday.

Israel has kept the main Karni cargo crossing closed for much of the year. The Israeli military cites security concerns, but Palestinians say they are being penalised for electing Hamas as their rulers.

Because the closures have choked off the flow of goods, compounding the misery caused by the economic boycott, Defence Minister Amir Peretz is considering showing greater flexibility at Karni, security officials said.

Mr Ayad is also fortunate that there is someone to treat him. None of the medical staff at Shifa has been paid for the past two months. It is the same for the rest of the Palestinian Authority's 160,000 workers whose wages usually come from a mix of foreign aid and customs duties now frozen by Israel with increasingly serious consequences for the 1 million Palestinians - one in four of the population - supported by government salaries.

The World Bank warned this week that its earlier predictions of a 50% rise in poverty in the occupied territories this year, driven by a sharp fall in personal income and a 23% increase in unemployment, may have been "too rosy", because it underestimated the extent of western sanctions against Hamas and the Israeli blockade.

"The recession has already begun, with March and April's public sector salaries so far unpaid and with signs of food and gasoline shortages manifesting in Gaza," the Bank said.

"If the Palestinian Authority remains unpaid/minimally paid for several months, it may cease to function ...

"A protracted period in which the PA is disabled might result in the unravelling of a dozen years of donor efforts to build the responsible, accountable institutions needed for a future Palestinian state."

Dr Nasser al-Atar still goes into Shifa's dialysis unit every day.

"I was last paid two months ago but I still come to work. It's my duty as a human being," he said.

But he is disturbed at what lies ahead. New filters for the dialysis machines finally arrived on Monday but they are designed for use on children and only provide for a part of the treatment required by other adults.

The blockade and aid cuts mean there are still none of the required drugs, forcing a cut back on treatment for the 160 outpatients, including 24 children, from three times to twice a week.

"Before long we will have to cut back the number of treatments again. Some more patients will die," said Dr Atar. "Look at the patients now. They look sick. Reduction in treatment means more anaemia. They are weaker."

Physicians for Human Rights - Israel, an independent medical charity, warned yesterday that the Palestinian health system faced collapse if aid continued to be withheld.

"Ending the funding to the health system will lead to the death of thousands of people in the short term and to extensive morbidity in the long term," it said.

Mr Ayad is one of those whose life may depend on what western governments decide.

"Please save my life. I have three boys and four girls. If you do not want to save my life for me, save it for my children," he said.

Eventually, on a rainy, cold day, my wife, Amina, carried Lina three miles on mountainous roads into Nablus to reach a doctor. One year later, we learned that the infection had caused renal failure and that Lina would eventually need a kidney transplant to survive.

For 16 months, Lina underwent dialysis every four hours. She spent many days in hospitals because of the kidney failure's side effects, including hypertension and hernia. Her limbs became as thin as toothpicks.

Tests showed that neither her mother nor I was a compatible kidney donor for Lina. In the spring of 2005, a South African friend named Anna offered to donate a kidney to save Lina's life. I had met Anna in 2003 during a peaceful protest campaign against the wall Israel is building in the West Bank

Anna was a compatible donor. We raised $40,000 for the surgery. Hadassah Hospital in West Jerusalem agreed to perform the operation at a discount.

But the next obstacle was obtaining a visa for Anna, who was blacklisted from entering Israel because of her activities - all completely nonviolent - protesting the occupation of the West Bank and Gaza. Anna fought for a visa - and only received one after the Israeli hospital administrator called the Israeli Interior minister.

For the transplant, the hospital helped me and my wife get permits to enter Israel for a full month - an exceptional feat. We considered ourselves lucky. But is anyone really lucky who needs special permission to be with one's child at a hospital? Imagine that, if you needed to be at your child's hospital bedside, you had to wait in line at a military base for hours or even days to plead for an entry permit.

Despite the difficulties, the transplant was successfully performed in October 2005 in Jerusalem. Unfortunately, this was not the end of Lina's difficulties. After Hamas won the elections in Palestine, the Israeli government tightened restrictions on Palestinians entering Israel. For a while it looked as if we would not get permission to enter for further treatments, but with difficulty we finally got approval to go to Lina's appointment scheduled for next week. We fear we will not get future permits.

Additionally, the U.S. and Europe have decided not to continue aid to the Palestinian government, which offered Palestinians free healthcare. As the Palestinian Authority grows poorer and poorer, our benefits will almost certainly disappear, and Lina may not be able to get her very expensive medications. Her life might be in serious danger.

Israel claims it needs to restrict Palestinian movement in response to the new Hamas-led government. But the reality is that Israel first established its system of permits and closures in 1991, and we have been living under these difficult conditions ever since.

My wife, daughter and I are active in a nonviolent movement that includes many Israelis, Palestinians and foreigners. Although we received our permits this time, others who need them have not. Denying permits to innocent men, women and children does not make Israelis safer. It destroys the hopes of Palestinians.

FAREED TAAMALLAH is coordinator of the Palestinian Elections Commission for the Salfit region. He lives in the West Bank village of Qira.

The Palestinian Authority is near to collapse due to a decision by the European Union, the largest donor to Palestinians under occupation to cut off vital aid. At the same time, the United States has moved aggressively to threaten anyone who tries to render assistance to suffering Palestinians, scaring banks from allowing cash transfers to the Palestinian Authority (a position they have had to review overnight in the face of the impending catastrophe threatening thousands of Palestinians).

According to Dr. Juma al-Saka, 300 of Gaza's 650 kidney patients are treated at al-Shifa hospital in Gaza, and due to the sanctions, their treatments were cut from a required three per week to just two. Four have already died, others are sure to follow unless the EU-US sanctions against the Palestinian people end.

Ha'aretz adds that, "Kidney ailments are not the only diseases going untreated, according to the doctor, who said that some cancer patients have stopped receiving chemotherapy and other vital drugs due to money and equipment shortages."

All of this is a flashback to the years after the 1991 Iraq war, when international sanctions killed hundreds of thousands of Iraqis, starting with the oldest, the youngest and the sickest. In US Secretary of State Madeleine Albright's immortal words, this holocaust was "worth it" if it helped the US achieve its policy objectives. I naively thought the lesson had been learned. Now the Palestinians are to have their turn.

Meanwhile, Israel continues to build a comprehensive system of apartheid, to kill Palestinian civilians and to steal their land with total impunity. On Saturday, 65-year-old Mousa Salim Mousa al-Sawarka, was killed by shrapnel to the head, when Israel shelled the area in the northern Gaza Strip where he was grazing his animals. The next morning, Hassan Hussein Khader al-Shaf'ei, 55, was killed by shrapnel throughout the body, while he was farming his land near the same area, and a woman, Fatima Mohammed Sahweel, 59, was wounded with shrapnel to right the eye. Israeli prime minister Ehud Olmert announced plans to build thousands of new Jewish-only housing units in the occupied West Bank. Within Israeli society, the dehumanization of Palestinians continues to advance: a new poll by the Israel Democracy Institute found that 62 percent of Israelis support "government-backed Arab emigration" - in other words ethnic cleansing of Palestinians.

As Israel's onslaught goes unchallenged by the US, the UN leadership, European and Arab governments, I am delighted to see that the UK's largest university and college lecturers union, the National Association of Teachers in Further and Higher Education (Natfhe), is about to vote again on a resolution to recommend that its 67,000 members boycott Israeli lecturers and academic institutions that do not publicly declare their opposition to Israeli policy in the occupied territories.

Ronnie Fraser, a Nafthe delegate who heads a group called Academic Friends of Israel, objected that "Academic work should not be blocked on political grounds." The UK Ambassador to Israel reacted to the boycott plan saying, "we do not believe that such academic boycotts are productive - far more can be obtained through dialogue and academic cooperation." Israeli professors should never be deprived of their ability to enjoy conferences in Oslo, London or Florence no matter how bad things get in Palestine, no matter how imprisoned Palestinians are in their ghettos and no matter how complicit major Israeli institutions are with the apartheid system. Will the UK government argue as loudly that kidney dialysis to the elderly should not be blocked on political grounds and demand that the EU stop collaborating with the Israeli siege?

The EU is now trying to deflect criticism by putting together a plan to channel aid to the Palestinians without going through Hamas. This palliative of yet another example of the EU stepping in to subsidize the occupation and mitigate its most pernicious effects so as to avoid the embarassment of actually having to confront Israel and roll back its colonialism.

Dor Energy is the only company supplying petrol and cooking gas to Gaza and the West Bank.

On Thursday, petrol stations in the West Bank were forced to close and supplies of cooking gas were reported to be running low.

In the Gaza Strip petrol station owners expect to exhaust their supplies by the end of Thursday, news agencies reported.

Mujahed Salameh, head of the Palestinian Petroleum Agency, said the fuel supply would be resumed on Friday.

On Wednesday, Dor cut off supplies to the Palestinian areas because of mounting Palestinian Authority debts amounting to about $26m.

It is not yet clear how an agreement was struck, but Mr Salameh had said earlier on Thursday that Palestinian President Mahmoud Abbas would be contacting Dor to arrange for payment of the debt from the Palestinian Investment Fund.

Doctors in Gaza and the West Bank had warned that a petrol shortage could be disastrous for their work, crippling the ambulance service and preventing employees from reaching clinics.

Financial crisis

The PA has faced financial crisis since foreign aid was frozen after Hamas - regarded as a terrorist movement by the US and EU - won elections in January.

A plan to channel donor aid directly to the Palestinians, bypassing the Hamas-led government, was agreed on Tuesday.

The EU, UN, Russia and the US said they would set up a "temporary international mechanism" to channel the money for an initial three-month period.

The US also said it would separately give $10m (£5.4m) in aid to the Palestinians through medical and children's charities.

"I hope that the Quartet mechanism doesn't plan to finance the salaries of PA workers under the Hamas government," said Ayalon. "It is known that the Quartet wants to promote humanitarian aid for the Palestinians, just as Israel wants to promote this. But paying the salaries of civil servants isn't the way. External financing of salaries will only strengthen Hamas, intensify violence, and block any chance of a solution."

Sources in Washington said EU representatives in the Quartet lobbied to include the payments of salaries as one of the goals of the mechanism, but US representatives strongly objected.

Ayalon said that if the payment of PA civil service salaries is put on the agenda, "Israel will know how to deal with this." He stressed that Israel would definitely not agree to paying salaries of education system employees, who poison the minds of Palestinian children with anti-Semitic texts.

The consent of the US to the establishment of the mechanism signals flexibility on the part of the Bush administration, which until now adhered to a rigid policy of preventing all aid to the PA, except for urgent cases of humanitarian distress. European and Russian representatives on the Quartet said in the discussions that 165,000 people paid by the PA government supported a third of Palestinian families in PA territories. A World Bank representative also participated in the talks; the World Bank will coordinate the practical aspects of the mechanism's operation.

At a press conference at the UN building in New York, Quartet representatives emphasized yesterday that the mechanism would be fully transparent, and bypass the Hamas government when distributing aid. The Quartet again called on the Hamas government to recognize Israel, reject terrorism, and honor all agreements between the PA and Israel.

The US has not made a final decision on how and to whom to distribute the mechanism's funds. These issues will be on the agenda when President George W. Bush and Prime Minister Ehud Olmert meet later this month.

Their main complaint is that "the thrust of US policy in the region (the Middle East) derives almost entirely from domestic politics, and especially the activities of the 'Israel Lobby'." There is much with which to disagree in the paper, including their assertion that Israel is not a vital strategic asset (there are many generals who would challenge that assertion). But there is also much truth, if we would only be honest with ourselves.

The usual suspects have jumped on the bandwagon, not merely to criticize but to condemn the paper in vitriolic words. Rep. Eliot Engel, a Democrat who represents the Bronx, declared it "anti-Semitic and anti-Zionist drivel." This is somewhat ironic since one of the complaints of Walt and Mearsheimer is that anyone who criticizes Israel is automatically labeled anti-Semitic. The ubiquitous Alan Dershowitz accused the authors of cribbing from neo-Nazi Web sites, which was a sophisticated way of tarnishing them as anti-Semites without using the phrase. The right-wing New York Sun called it a "scandal" and warned that if Harvard is not careful, "the Kennedy School will become known as Bir Zeit on the Charles."

The Forward was most responsible. Before writing an extensive critical analysis of the paper it acknowledged that "the authors are not fringe gadflies but two of America's most respected foreign-affairs theorists. ... Though it's tempting, they can't be dismissed as cranks outside the mainstream. They are the mainstream."

I agree with Walt and Mearsheimer that AIPAC controls our American government policy toward Israel. But in their paper the two political scientists point out that, "In its basic operations, the Israel Lobby is no different from the farm lobby, steel or textile workers' unions, or other ethnic lobbies. There is nothing improper about American Jews and their Christian allies attempting to sway US policy; the Lobby's activities are not a conspiracy of the sort depicted in tracts like the Protocols of the Elders of Zion."

Coming from South Florida, I am acutely aware that our government policy toward Cuba is dictated by the Cuban Lobby. Why else would we have such an absurd opposition to Castro? If we can make peace with Red China and the "evil empire" of the Soviet Union, why do we continue an embargo against an obscure Communist island, if it were not for domestic political pressure? So it is with the Jewish domestic lobby. My complaint is that the self-appointed Jewish leaders who control AIPAC and other positions of power within the Jewish community do not represent the best interests of Jews, Israel or the United States in the long run.

Let's zero in on AIPAC. It is controlled by right-wing, rich Jewish neo-conservatives. As one manifestation of the truth of this assertion one merely has to look at its annual meeting this past month. At a time when Vice President Cheney's popularity has dropped below 20 percent, the 4,500 delegates to the AIPAC convention gave him a standing ovation for almost a minute before he even opened his mouth and then proceeded to give him 48 rounds of applause in a 35-minute speech. (As my colleague Leonard Fein pointed out, that's once every 43.7 seconds). Considering that 75 percent of American Jews voted for Kerry, it is obvious that these people are out of the mainstream of Jewish thought.

At the same conference, preceding the recent Israeli elections, these delegates were addressed by Ehud Olmert (Kadima), Amir Peretz (Labor) and Benjamin Netanyahu (Likud) by video link from Israel. Olmert and Peretz received polite applause. The AIPAC delegates cheered enthusiastically for Netanyahu, especially when he presented his hard line that was overwhelmingly rejected by the Israeli electorate. Once a great organization, today AIPAC does not even represent the feelings of the average Israeli, let alone the average American Jew.

This American Jewish neo-conservatism is unhealthy not only for America but for Israel as well. A prime example: The Israeli press reports that Israel is trying to find a way to deal with the Palestinians while not dealing with Hamas. Official public statements aside, they realize that they cannot cut off all contacts with the Palestinians and that the world cannot discontinue financial help; otherwise Israel will find a million starving Palestinians on its border, and this will not lead to peace or security for Israel. Privately, the Israeli government was against the Palestinian Anti-Terrorism Act (the Ross-Lehtinen-Lantos bill) which recently passed the House of Representatives. It would cut off all American contacts with the Palestinian Authority, even with its president Mahmoud Abbas, who is a moderate seeking peace. Despite Israel's private reservations, AIPAC not only pushed this bill, it was instrumental in writing it. Even though the AIPAC candidate lost in Israel, he won in the U.S. House of Representatives. Hopefully, the Senate and the White House will correct this.

Beware that you are reading treasonable material. If you "out" the Israeli lobby and you are Gentile, you're branded an anti-Semite; if you are Jewish, you're obviously a self-hating Jew. The Jewish establishment abides no criticism of Israel. You don't agree with me? Take this example: Last month a pro-Palestinian play entitled My Name is Rachel Corrie was to open at the New York Theatre Workshop, a "progressive" company on East Fourth Street. The play is based on the writings of a young British [sic] girl who was crushed to death by an Israeli bulldozer when she was protesting the demolition of Palestinian homes in Gaza two years ago. Although the play was widely praised in London last year, it never opened in New York. The theater producers spoke to the ADL and other Jewish leaders, including big-money Jews on its board, and that was the end of that. But, of course, we don't "censor" discussion concerning Israel. We just politely give our opinions and the voice of the other side disappears.

Another example: 400 rabbis, including myself, signed a letter sponsored by Brit Tzedek v'Shalom that appeared in the Forward this past month. It was a mildly liberal statement that proclaimed that "we are deeply troubled by the recent victory of Hamas," but went on to urge "indirect assistance to the Palestinian people via NGO's, with the appropriate conditions to ensure that it does not reach the hands of terrorists." Pretty mild stuff. Yet pulpit rabbis across this country who signed the letter have reported a concerted effort to silence them. The letter has been branded a "piece of back-stabbing abandonment of the Jews of Israel." Synagogue boards have been pressured to silence their rabbis by that loose coalition called the "Israel Lobby."

Just another example of the Jewish establishment stifling any discussion of Israel that does not conform to the neo-conservative tenets of AIPAC and its cohorts. Beware of these self-appointed guardians of Israel and Jewish values. In the end they will destroy everything that makes Judaism a compassionate religion, and if in their zeal they do not destroy Israel, they certainly will not make it more secure.