The Europeans and Americans have a problem with the Palestinian government. Actually, the problem is with the guidelines on how to treat it.

After Hamas won elections last year and took over governing, the European Union and United States broke off all contact with the administration and ceased all forms of official financial support to the government. Hamas is seen by both groups -- and by Israel as well -- as a terrorist organization to which no contact should be made until it swears off violence, recognizes Israel's right to existence and agrees to treaties the late Yasser Arafat made with Israel.

Hamas has not responded to the demands. More than one year later, and after a massive effort on the part of Saudi Arabia, it was, however, ready to participate in a government with President Mahmoud Abbas' Fatah and non-aligned representatives who do meet the conditions set by the West.

But who sets the government's direction? Hamas or the moderates? It's the answer to this question on which the Europeans and Americans should base their reaction.

There is no unified reaction. Washington sees little new in the new Palestinian government and the Europeans are, again, speaking with different tongues: London wants to keep up pressure for the boycott, while Paris is apparently ready for direct contact with the government.

Even the United States wants to change its course with the Palestinian government and act in a manner similar to what it did with the Lebanese government when some of its ministers belonged to Hezbollah. Contact with the government, yes. But not with its extremists.

The US Consul in Jerusalem set the tone. He spoke with the new Palestinian finance minister, Salam Fayyad, and Washington seemed ready to deliver aid money through him.

If Washington follows through, Brussels is likely to follow soon. But it would be wrong to speak of a lifting of sanctions, since they never actually existed.

Minister Fayyad let it be known that international aid for Palestine in 2006 was twice as much as the year before, amounts backed up by the World Bank. The help he said arrived came via emergency aid out of Europe, the Arab world and the United Nations and was paid to organizations without connections to Hamas. The aid was mainly intended to soften the effects of a finance boycott placed on the Hamas government when it took power a year ago.

Saying the sanctions were lifted would bring the confusion full circle. The USA and Europe put an embargo on the Palestinians' legitimately elected government to force it to change course. Hamas does not give in, so instead, the West modifies its position. And on top of that everyone admits that aid was actually doubled under the generally lamented sanctions.

What a demonstration of concentrated helplessness and lack of new ideas.

Peter Philipp is Deutsche Welle's chief correspondent and a Middle East expert (sms)