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By John Chalmers

BRUSSELS - The European Parliament unblocked a chunk of EU aid for the Palestinian Authority on Wednesday after hearing a vigorous rebuttal of allegations that the bloc's assistance was being used to fund "terrorism". External Affairs Commissioner Chris Patten told a parliament committee the European Commission was "one of the most demanding donors in the world when it comes to rigorous controls". "There is no case for stating that European Union money has financed terrorism, that it has financed the purchase of weapons or other similar activities," he told the parliament's Committee on Foreign Affairs. In a show of hands, the committee approved budgetary assistance of 18.7 million euros for the Palestinian Authority. Patten then went straight into a hearing with the budget committee, which had frozen the payment after Israeli allegations EU money was paying salaries of "terrorists" within Palestinian President Yasser Arafat's Fatah faction. It, too, voted to unblock the funds. "It was all a storm in a teacup," commented one European deputy as Patten and his advisors walked out in quiet triumph. The 15-nation EU is the biggest donor to the Palestinian self-rule authority. Much of the money goes to pay salaries of teachers, civil servants and police, especially since Israel has blocked Palestinian revenues to pressure Arafat into halting a wave of suicide bombings. EU officials say Commission and International Monetary Fund officials on the ground closely supervise how the aid is spent to guard against fraud or misuse of the funds.

"No evidence"

Patten said the EU executive - in collaboration with Israeli authorities, Israeli defense forces and the IMF - had investigated charges made by Israeli cabinet minister Danny Naveh last month, and found them to be without foundation. "We have found no evidence of European Union funds being used for purposes other than those agreed with the Palestinian Authority," he said. Patten, whose knack of blending politeness with bluntness infuriated Beijing when he was the last governor of colonial Hong Kong, dealt sternly with questioners. He also sought to rubbish an article in the German weekly Die Zeit, headlined "Arafat bombs, Europe pays". In a letter sent to the weekly, Patten's spokesman slammed the report as "sensationalist and one-sided" and shot through with factual errors. Israel, which enjoys broad support from the United States since an uprising against its occupation of Palestinian land began in September 2000, has in the past accused the Europeans of siding with Arafat. Patten went out of his way at the start of his intervention in parliament to condemn the Palestinian suicide bomber attacks as "horrendous acts of terrorism". But he defended the EU's decision to provide budgetary funding and aid for reform to the Palestinian Authority, saying this was the best security guarantee for Israel because the alternative would be "Palestinian anarchy".

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