The Israeli government approved a phased transfer of $562 million Sunday to the terrorist Palestinian Authority (PA), headed by Fatah's Mahmoud Abbas, also known as 'Abu Mazen'. Prime Minister Ehud Olmert acknowledged that there is a risk that Abbas will cave in to pressures from the Arab world and again form a "unity government" with Hamas. In case this happens, Olmert admitted, the funds being transferred will likely fall into Hamas' hands.

Olmert said, however, that he left his meeting with US President George W. Bush with the message that the transfer of funds would open "a window of opportunity for 'the peace process.'"

The first installment of the transfer is expected to be handed over within the next few days. The government was assured that the transfer is to be accompanied by the establishment of an "oversight mechanism" that will supposedly ensure that they do not fall into terrorist hands.

The funds in question are tax monies collected by Israel for the PA from residents of eastern Jerusalem. They were frozen after the Hamas won the PA elections in 2006.

MK Eldad noted that the government was now Hizbullah's partner in arming Fatah

The money transfer will be the chief "gesture" the government intends to present to Abbas in Monday's regional summit meeting at Sharm el-Sheikh. Diplomatic sources said there was no intention at the moment to hand over more weapons and ammunition to Abbas, but hinted that Israel would be forthcoming if asked by American mediator Keith Dayton to take additional steps – presumably, to ease restrictions on movement in Judea and Samaria.

Only two ministers voted against the measure: Avigdor Lieberman and Yitzhak Aharonovich of Yisrael Beiteinu. However, Minister Lieberman said Sunday that his party would not leave the ruling coalition despite the decision. “Abu Mazen, [Fatah Gaza terror leader Mahmoud] Dahlan, and the rest of those wimps have no intention of arresting even one terrorist,” Lieberman said, adding that "Abbas is an opportunist who tours the world but has violated every agreement." However," Lieberman added, "Yisrael Beiteinu will remain in the coalition in order to influence the government from within."

Olmert was asked about the risk involved in easing restrictions on the PA, and replied: "When you make a move like this, you have to be willing to take risks, although it isn't easy."

At this point, Minister Lieberman said "the problem is that we only take risks and never get anything in return. Oslo A, Oslo B, the Disengagement. We took risks but what good did it do?"

General Security Service (Shabak) chief Yuval Diskin told the government that Abbas, whose forces were clobbered in Gaza, is weak in Judea and Samaria as well. "The Fatah is divided and crumbling," he said. "It is not as strong in Judea and Samaria as one might think."

Deputy Prime Minister Eli Yishai (Shas) said that by handing over the money in stages, "we will be able to verify if Abu Mazen's strengthening is only declarative… If he does not get stronger we will stop transferring money."

"Lieberman is a partner to terror"

Four members of the National Union / National Religious Party fired a simultaneous rhetorical salvo at Minister Avigdor Lieberman, for his decision to stay in the government despite the decision to aid the PA.

MK Aryeh Eldad called the decision “foolish and criminal,” and called on Minister Lieberman to leave the coalition, saying that Lieberman was now a “partner to terror” despite voting against the money transfer. He noted that the government was now Hizbullah's partner in arming Fatah.

MK Effie Eitam called on Lieberman to leave the government as well, saying the government’s decision “proves that Lieberman has zero influence.” Eitam added: "Lieberman's earlier statement – 'if Hamas is not taken apart, the government will be taken apart' – was proven today to be a hollow one. Meanwhile, the Hamas took apart Gaza and Olmert is taking apart Lieberman in the government."

MK Uri Ariel said "Minister Lieberman is trying to be a member of the government without being responsible for its failures… These funds are fueling terror and no sleight-of-tongue will change this."

MK Tzvi Hendel asked – "How far shall we take this folly? Instead of bringing back our deterrence capability and finishing off Gaza's terror and its leaders, Olmert is nurturing a new false Golden Calf in the form of Abu Mazen and the Fatah, and thus building the basis for a new keg of terror which will go off in Judea and Samaria."