Stop Funds for Hamas, Says Rice

The US national security adviser, Condoleezza Rice, yesterday urged the European Union and Arab countries to block all funds to Hamas, Islamic Jihad and other Palestinian militant groups.

In London en route to the Middle East, Ms Rice, who has been asked by President Bush to take charge of trying to broker an Israel-Palestinian peace process, described Hamas and Islamic Jihad as "rejectionists" because they were, until now, unwilling to accept the existence of Israel.

Although such groups were proscribed in the EU, a distinction was often made between their violent acts and the social services they provided. She called on the EU to end funds for the latter.

She said the US believed that Abu Mazen was the kind of Palestinian leader required for a peace process and "it is for Israel to take the opportunity before it".

A promised ceasefire, signed by the three main Palestinian militant groups, failed to materialise yesterday. An Israeli man was shot by a 15-year old member of the Al Aqsa Martyrs Brigade, while the Israeli army demolished a house in Gaza. Several rockets were fired at Israeli towns from Gaza but no one was injured.

Yasser Arafat, the chairman of the Palestinian Authority, said he expected a declaration on a ceasefire yesterday, but leaders of Hamas and Islamic Jihad said it might take a few days.