Peace Bust Imperils $2.2 Billion for Aid-Needy Palestinians

Bucking U.S. warnings to keep his distance from Hamas won’t come cheap for Palestinian President Mahmoud Abbas.

Already hobbled by anemic tax collection and depressed economic growth, the West Bank-based Palestinian Authority stands to lose more than $2 billion a year, or half its budget, following the collapse of peace talks with Israel. Western powers have threatened to withhold aid after Abbas, challenged to give Palestinians hope by laying out an alternative vision of achieving statehood, announced a reconciliation pact with the Gaza Strip’s militant Hamas rulers.