The Israeli cabinet on Sunday approved a plan to release 50 million shekels (about 11 million U. S. dollars) in customs duties to fund the purchase of medical equipment for residents of the West Bank and Gaza Strip, the prime minister's office said.

The money, collected on behalf of the Palestinian National Authority (PNA), had been frozen by the Israeli government shortly after the victory of the Islamic Resistance Movement (Hamas) in January's Palestinian legislative election.

The cabinet okayed the decision to release the fund ahead of Israeli Prime Minister Ehud Olmert's departure for Washington for a meeting with U.S. President George W. Bush.

However, Olmert told a weekly cabinet meeting that the fund would not be transferred in a cash payment.

"As a rule we do not hold contacts with Hamas, because it runs a terror government," Olmert said.

Olmert said, "The civil service and ministerial figures are not and will not hold contacts (with Hamas)," but in light of the complex reality, points of contact are inevitable.

He added that the decision "could not imply that we recognize the Hamas government."

Customs duties is worth around 60 million dollars a month for the PNA.

The plan is to relieve the humanitarian crisis in the Palestinian territories due to the cut of an economic aid by the United States and the European Union following Hamas' victory.

Source: Xinhua