PARIS, June 13 (Reuters) - France called on Wednesday for the European Union to resume its direct financial aid to the divided Palestinian government, arguing that the cash would bring stability as rival factions clashed in Gaza. At least 65 Palestinian deaths have been confirmed by hospital officials since Saturday in the fiercest internal violence in months between Hamas and Fatah, which together formed a unity government in March under Saudi mediation. French Foreign Ministry spokesman Jean-Baptiste Mattei said the violence should stop immediately and called for an increase in direct aid to the government despite the split. "We call on the international community, in particular the European Union, to resume the direct budgetary aid to the Palestinian government, in accordance with the modalities defined by Palestinian Finance Minister Salam Fayyad," Mattei said in a statement. Western donors led by the United States cut off direct financial aid to the Palestinian Authority in March 2006 after the militant Hamas group defeated Abbas's secular Fatah faction in a parliamentary election. Coupled with Israel's withholding of tax revenues that it collects on the Palestinians' behalf, the sanctions have pushed the Hamas-led government to the brink of financial collapse. The EU provides direct support to the Authority's workers outside of security forces, paying allowances through a mechanism that bypasses the Hamas-led unity government, and Western diplomats said last week the EU and other Western donors were considering expanded aid programmes. But France, one of the first and most enthusiastic supporters of the unity government deal, called for a resumption of all suspended aid, channeled through a Palestinian Liberation Organisation accounts controlled by Fayyad, a member of Fatah. EU officials have insisted that despite its formation of a unity government with Fatah, they will not help Hamas until it clearly renounces violence and recognises Israel. Some Palestinian officials argue that Hamas is already de facto engaging with Israel. "The stabilisation of the Palestinian territories, the support of the moderates and the revival of the peace process are at stake," Mattei said.
