BRUSSELS, Feb 20, 2009 (IPS) - European Union aid has been given to an Israeli oil company which has reduced the supply of fuel to Gaza as part of an economic blockade internationally recognised as illegal, Brussels officials have admitted.

Almost 97 million euros (124 million dollars) in funds managed by the European Commission, the executive arm of the EU, were handed over directly to the firm Dor Alon between February 2008 and January this year. Under orders from the Israeli authorities, Dor Alon has been rationing the amount of industrial diesel brought into Gaza in order to deprive its 1.5 million inhabitants of electricity. Power cuts have been a regular occurrence in Gaza because of Israeli actions undertaken since the militant party Hamas won an unexpected victory in Palestinian legislative elections during 2006.

Charles Shamas from the Mattin Group, an organisation based in the West Bank that monitors Europe's relationship with Israel, said that the EU has been helping to accommodate the economic blockade of Gaza. This is despite how the Union's most senior diplomats, including its foreign policy chief Javier Solana and the external relations commissioner Benita Ferrero-Waldner, have condemned the blockade as 'collective punishment' of a civilian population. Collective punishment constitutes a war crime, according to the 1949 Geneva convention.

"The European Union has to give aid lawfully," said Shamas. "That means a good faith effort not to conform to the wrongful acts of others. In this case, the EU is giving effect to wrongful measures by Israel. You can't really credibly call on Israel to correct its behaviour if you are adjusting what you do to fit in to that behaviour."

Christiane Hohmann, spokeswoman on external relations for the European Commission, said that the diesel provided by Dor Alon is used in a power plant that meets 30 percent of Gaza's electricity requirements. Schools and hospitals are the primary beneficiaries of the EU's aid, she added, stating that Dor Alon delivered more than 96 million litres to Gaza as a result of the money it received from the Commission over the past 12 months. Dor Alon has also benefitted from aid granted by Germany and Belgium, both EU member states.

"This is not abetting the blockade," she said. "It is not part of it. What we are always saying to the Israelis is that they need to open the crossings (into Gaza). The heavy diesel needs to get in."

The Commission's aid is administered through a mechanism known as Pegase. Beginning its operations last year, Pegase is designed to bypass Hamas, while supporting activities run by its rival Fatah, the party in charge of the Palestinian Authority in the West Bank. Hohmann stressed, however, that aid to Dor Alon is paid to the company itself and "doesn't go through any Palestinian structure."

A spokesman for Dor Alon said that any reduction in its deliveries to Gaza has been the result of Israeli government policies. "Dor Alon is a private company, it has to do whatever the ministry of defence tells us to do," he added. "I cannot tell you that we deliver more one day and less another day. That doesn't concern us. We follow orders in that matter."

One of the four largest fuel companies in Israel, Dor Alon also owns two chains of convenience stores, Alonit and AM:PM. As well as its activities in Gaza, it runs a network of petrol stations and shops in Israeli settlements in the West Bank.

"What's happening here is that the Israeli economy is controlling access to the Palestinian markets to ensure the benefit of certain Israeli companies," said Merav Amir, campaigner with the Coalition of Women for Peace, an organisation that studies how Israeli firms can profit from the occupation of Palestine.

Amir pointed out that all international aid destined to the Palestinian Authority has been routed through Israel since the Oslo accords. Signed between Israel's president Shimon Peres, then foreign minister, and Palestinian president Mahmoud Abbas in 1993, this was the first agreement negotiated face-to-face between the two sides. Yet while its official title referred to the self-government of the Palestinians, many observers feel that Israel has used the agreement to reinforce its control over the West Bank and Gaza.

"Israel holds a lot of money that actually belongs to the Palestinian Authority," added Amir. "With some of that money, it pays the suppliers in a way that sustains the dependence of the Palestinian economy (on Israel). The European Union is in a position to pressure Israel to change how all of this is done."

Chris Davies, a British Liberal member of the European Parliament, this week described how the blockade of Gaza, which he recently visited, is having devastating consequences in a densely populated area that is struggling to come to terms with the 22-day bombardment that Israel launched in late December last year.

Although 500 lorry loads of food and other supplies are needed each day in Gaza, Israel is only allowing 130 to pass through checkpoints controlled by its troops. "Paper for schools, nappies, water purifying tablets, concrete for rebuilding, they are all prohibited," he said. "The normal life of a big city is impossible." (END/2009)