The 11 September 2001 attacks in the U.S. and revelations that the al-Qaeda network made extensive use of charitable institutions to raise funds for its operations, have reinforced concerns about the relationship between Islamic social welfare activism and terrorism. The Palestinian Islamic Resistance Movement (Hamas), which has conducted a series of devastating armed attacks during the current conflict, particularly against Israeli civilian targets, and which supports an extensive network of social welfare organizations in the West Bank and Gaza Strip, has come in for particular scrutiny.

The concern that charitable activity and political violence are connected is legitimate and raises genuine policy dilemmas. These need to be addressed seriously but also with careful attention to distinctions and nuances rather than with a one-response-meets-all-contingencies approach. Eradicating Islamic social welfare activism would be unlikely to reduce seriously Hamas military activity, its attacks against Israeli civilians, or indeed its proclaimed goal of eliminating the state of Israel. Rather, it would worsen the humanitarian emergency, increasing both the motivation for Hamas to sustain its military campaign and popular support for it. And, without substantial evidence that welfare institutions systematically divert funds to support terrorist activity, it would be an overbroad and indiscriminate response.

Rather than a blanket ban, the test which should be applied, by the international community and the Palestinian Authority alike, is whether the charitable institution in question can be shown to have transferred monies to fund activities of paramilitary organisations, whether it helps recruit members for such groups, or whether its educational teachings promote intolerance or violence.

Hamas activism presents a challenge to Palestinian and international policy-makers. It is a vital support for hundreds of thousands of Palestinians at a time when renewed conflict with Israel has produced a growing humanitarian emergency. But at the same time it has helped create that emergency by its escalation of indiscriminate bombing of civilian targets – attacks that, like all those that deliberately violate the laws of armed conflict, ICG unreservedly condemns.

The accusation that Hamas misuses Islamic charitable activities takes several forms. First, Hamas is suspected of diverting charitable funds to finance its military infrastructure and activities. Secondly, Islamic social welfare institutions affiliated with Hamas are charged with inciting violence and recruiting militants among beneficiaries of their services. Thirdly, the existence of a network of social welfare organisations affiliated with Hamas, and the demonstrated capacity of this network to support groups neglected by the Palestinian Authority (PA) and international donors, are considered central to the Islamist movement’s growing appeal and, therefore, to its ability to sustain a campaign of violence.

Under pressure, the PA has taken some action. But too often it has sought mainly to assuage international opinion and fend off the Hamas threat to its own predominance rather than adopt a sound policy. It has periodically shut down Hamas-affiliated charitable institutions only to allow them to reopen later, while not cracking down on the movement’s armed wing. Israel, meanwhile, has enhanced Hamas’s standing in the Palestinian community by actions that often go far beyond what security concerns could legitimately justify and significantly worsen the humanitarian situation in the West Bank and Gaza. Palestinian unemployment, poverty, and malnutrition rates – soaring to levels unprecedented since 1967 – have contributed to radicalisation of large segments of the population.

The international community has been both inconsistent and inefficient. The U.S. seeks to ban all assistance to Hamas-affiliated organisations; most of its Western partners, however, distinguish between support for Hamas’s legitimate and illegitimate activity; and many Arab governments permit funds to be raised on their territory for Islamic social welfare and Islamist militant organisations without distinction. At the same time, neither the West nor the Arab world has provided sufficient humanitarian aid or persuaded Israel to loosen its stranglehold on the civilian population of the occupied Palestinian territories.

Any approach to the issue of Islamic charitable institutions – whether independent or affiliated with Hamas – must start from the premise that they are critical in Palestinian life. Hamas in particular has since its inception invested heavily in charitable work and considers this central to its identity and purpose. With the onset of the intifada, the ensuing devastation of the PA and other harsh Israeli measures, in particular closures, its welfare activity has become more vital than ever. Roughly two-thirds of Palestinians live below the poverty line, and Islamic social welfare organisations, directly or indirectly, provide emergency cash assistance, food and medical care as well as educational and psychological services, to perhaps one out of six. By most accounts, such institutions are more efficient than their secular or official counterparts, delivering aid without distinction as to religious belief or political affiliation. Certainly, they are perceived as such by the Palestinian public.

Over the longer run, the challenge is to steer the radical Islamist movement – an important component of Palestinian society – away from violence and terrorism, and toward a constructive role both in domestic Palestinian politics and in forging peace between Israel and the Palestinians. Though success so far is elusive, the Egyptian-sponsored intra-Palestinian dialogue is a significant attempt. For now, the PA and the international community should focus on stopping Hamas’s attacks against civilian targets and whatever fund diversion to any violent or paramilitary activity that exists. Any decision to shut down a social welfare institution or deny it funds should be closely based on proof that it either diverts funds for illicit purposes, is a platform for recruitment into Hamas’s military wing or incites violence.

Rather than attack Islamic social welfare, a better response for those who seek to reduce its influence is to establish an equally effective social welfare network. Wholesale elimination of Hamas’s Islamic social welfare sector would carry a heavy risk of backfiring, fuelling more violence and terror, and hurting a population already in a deteriorating humanitarian emergency.

There are inherent limits to what can be done in an environment of occupation, violence, closures and virtual PA collapse to set up an alternative welfare network, enforce rules against money laundering, or institute more rigorous accounting practices. Genuine reform of the charitable sector, like much else, probably must await an end of the current confrontation. On that, ICG has expressed its views: achieving a sustainable end to violence requires the international community to present and energetically promote a comprehensive endgame solution.^[fn]See ICG Middle East Report N°2, Middle East Endgame I: Getting to a Comprehensive Arab-Israeli Peace Settlement, 16 July 2002.Hide Footnote Still, in the absence of that step and within the boundaries of the existing situation, there are a number of measures that can be taken, as recommended below.

Amman/Brussels, 2 April 2003