Gaza suffers more power cuts after EU freezes funding

GAZA CITY (AFP) - Parts of the Gaza Strip were still suffering power cuts yesterday after the European Union suspended the financing of fuel deliveries for the impoverished territory's only power plant.

It was the latest blow to hit one of the world's most overcrowded places that has been effectively sealed off by Israel since the Islamist movement Hamas seized control two months ago, sparking fears of a humanitarian crisis.

The Islamists and the Western-backed government in Ramallah accused each other of being responsible for the "criminal" cuts and called on Gazans to come out on to the streets in protest.

The power station -- which according to the EU produces between 25 and 30 percent of the electricity in Gaza -- shut the last of its four generators yesterday after it did not receive fuel from Israel, its chief Rafiq Maliha told AFP.

The Israeli company that delivers the fuel said the EU -- which finances the supplies -- had made the decision to halt deliveries.

"The EU representative told us not to deliver because there is no guarantee that we will receive payment for today's fuel," the Dor Alon company said in a statement. "That is why we are not delivering fuel for the plant."

An EU spokeswoman confirmed that it had suspended the payments yesterday, but that no permanent decision had been taken.

"The European Union did not finance payments yesterday. A review is ongoing for all parameters of this programme," Alix de Mauny told AFP, without elaborating.

"We hope to resume (financing) within 24, maximum 48 hours, depending on the outcome of that assessment."

Another EU official, who requested anonymity, voiced surprise that the plant had been shut down, saying "according to our assessments, there should have been enough fuel for another couple of days."

Most the territory's electricity comes via power lines from Israel, and a small percentage from Egypt.

A senior Palestinian official in Ramallah told AFP the EU made its decision because of problems collecting money from Hamas -- the Islamic Resistance Movement that has controlled Gaza since its bloody takeover on June 15.

"The European side ordered the company that delivers the fuel to stop delivering because there is a problem with collecting money from Hamas," said Mujahed Salama, a senior official with the Palestinian petrol authority.

"Because of that, the European side will not pay the company until they solve the mess of the money collection in Gaza."

According to the current arrangement, the EU finances fuel deliveries, while the Palestinian electricity company collects payments from the population and deposits them into finance ministry accounts.

Hamas assumed control over the electricity company several weeks ago when it arrested its head Suleiman Abu Samhadana, and replaced him with a sympathiser, officials said.

Since then, the finance ministry -- controlled by the Ramallah-based cabinet which president Mahmud Abbas set up after the Gaza takeover and which the Islamists refuse to recognise -- has not received payments for the electricity, officials said.

"We warned for weeks that Gaza would fall into darkness if Hamas does not stop occupying the electricity company and does not stop holding on to millions of shekels that they collected from the people of Gaza," information minister Riyad al-Malki told reporters in Ramallah.