Bush sees vote proving 'power of democracy'

WASHINGTON -- President Bush praised the Palestinian election yesterday as proof of ''the power of democracy." But his administration was left grappling with the victory of a group it considers a terrorist organization, posing a dilemma that pitted Bush's policy of promoting democracy in the Middle East against his goal of fighting terrorism.

Bush told reporters at a news conference yesterday that Palestinian voters handed Hamas a sweeping victory over the ruling Fatah party because they were fed up with its ingrained corruption.

''The people are demanding honest government," Bush said. ''We're watching liberty begin to spread across the Middle East."

But in the next breath, Bush urged the Palestinian Authority's president, Mahmoud Abbas, elected last year on Fatah's ticket in a separate vote, to stay on in his post. Bush warned that the United States would not deal with Hamas unless the group renounces terrorism, lays down its arms, and stops advocating for the destruction of Israel.

''I don't see how you can be a partner in peace if you advocate the destruction of a country as part of your platform," Bush said. ''And I know you can't be a partner in peace if your party has got an armed wing."

The Hamas victory could make Bush's agenda of promoting democracy more difficult if Arab governments point to Hamas's success as proof that ''the bad guys win," said Aaron David Miller, scholar at the Woodrow Wilson Center for International Scholars and a former adviser to six secretaries of state on Arab-Israeli negotiations.

The Hamas victory occurs after Muslim Brotherhood, a banned fundamentalist opposition group, made significant advances in Egypt's parliamentary elections last year. In Lebanon, Hezbollah, considered a terrorist group by the United States, has also attracted growing voter support. There, the United States goes around Hezbollah by working with other parties in the Lebanese government.

But US government officials were careful to praise the Palestinian election process yesterday as peaceful and fair, despite the results. Secretary of State Condoleezza Rice congratulated the Palestinian people in a conference call to the World Economic Forum in Davos, Switzerland, but warned that ''democracy brings not just rights, but it brings obligations and responsibilities, too."

''One of those responsibilities is to care for and to be a fighter for peace, not for war and not for violence," Rice said. ''We understand that this is a transitional period, but anyone who wants to govern the Palestinian people and do so with the support of the international community has got to be committed to a two-state solution, must be committed to the right of Israel to exist."

Rice is slated to meet in London on Monday with European leaders, who are expected to issue a strong international message to Hamas that it must cease to be a militant force and become a responsible political party.

''Hamas has to make a decision of where it's going to stand," said a State Department official who spoke on the condition of anonymity because she is not authorized to be quoted. ''The ball, to some degree, is in Hamas's court."

In recent weeks, Hamas has made contradictory statements -- offering to extend its truce with Israel and threatening to continue its war on the Jewish state. Yesterday, Hamas, which won a solid majority of the 132 seats in the legislative council, called for a coalition with Fatah -- a situation that could maintain at least some diplomatic contact with the United States and some financial support.

Hamas leaders are awaiting instructions from the group's top leader, who is living in exile in Syria, said Yigal Carmon, president of the Middle East Media Research Institute, which tracks the statements of Hamas and other Palestinian and Arab groups. But Carmon said the group is displaying signs of panic. ''It's too big a victory," Carmon said. ''They face responsibilities for which they may not have been prepared."

US officials said yesterday that they would have to wait and see what kind of government the Palestinians form before cutting off contact or foreign assistance, which keeps the troubled Palestinian government afloat.

According to the World Bank, Palestinians received $1.1 billion in foreign aid last year. The Palestinian Authority depends almost entirely on foreign aid and tax revenue refunded to it by Israel, both of which can be easily cut off.

Congress has long prevented direct foreign assistance to the Palestinian Authority without a special presidential waiver. In recent months, Bush has signed such a waiver, allowing assistance to flow directly into the coffers of the Palestinian government, but most analysts say this is unlikely to continue with Hamas in power.

The Hamas victory calls into question a proposal by James Wolfensohn, the former World Bank president who now heads Bush's economic initiatives in Gaza and the West Bank, to funnel $3 billion a year for the next three years to the destitute territories.

Tamara Wittes, a Middle East specialist with the Brookings Institution, a Washington think tank, said Hamas's victory will force the group to become a political party that can seek aid successfully from Europe and the United States. ''They know that a large portion of their support comes from their history as an effective social welfare organization," Wittes said. ''They can't do that without a budget."

But James Prince, president of the Democracy Council, a nonprofit group that conducted an anticorruption program to make the Palestinian Authority more accountable, said donors must be more careful about how they give assistance. ''They have been able, for political reasons, to announce that they are not funding terrorist groups directly," he said. ''However, the US does not track where their money ends up."

The Hamas victory also called into question whether Army Major General Keith Dayton, the special envoy leading a project to bolster Palestinian security forces, would continue his work.

Bush insisted yesterday that despite the Hamas victory, the Palestinian people want peace. He also insisted that democracy -- in the long run -- will bring it.

Thanassis Cambanis of the Globe staff contributed to this report from Jerusalem.