France has called for the creation of a World Bank fund to pay the salaries of Palestinian officials.

Jacques Chirac, the French president, proposed it on Friday before he met with Mahmoud Abbas, his Palestinian counterpart in Paris.

Jerome Bonnafont, Chirac's spokesman said France will raise the issue during talks on May 9 with the United Nations, the United States, the European Union and Russia - the four key international players behind the stalled "road map" peace plan.

France and other European Union nations earlier this month cut off direct aid to the Palestinian government after Hamas's election victory. The European Union is the largest donor to the Palestinians, with aid totaling more than 600 million US dollar a year.

Because of international sanctions, the Hamas-led government has been unable to pay salaries to 165,000 Palestinian government employees.

France believes aid "must be maintained for humanitarian reasons, as well as for political reasons," Chirac said. "And it will push for this continuance (of aid) within the international community and notably within the European Union."

Abbas confirmed at a later news conference that the World Bank channel was among those discussed with Chirac to get aid to the Palestinian people.

"If we do not reach a solution, it will be catastrophic," he said. "The situation is very grave, complex and sensitive."

Chirac said humanitarian aid must be maintained and enlarged "in particularly through the agencies of the United Nations," his spokesman said. He said aid must channel through institutions independent of the Palestinian government.

The French leader also suggested that more aid could be placed under the authority of Abbas his spokesman said.

Chirac asked Hamas to respect the demands of the international community: to renounce ‘violence’ and recognise Israel's right to exist.

PHOTO CAPTION

French president Jacques Chirac (L) speaks with Palestinian leader Mahmud Abbas as he arrives for talks at the Elysee. (AFP)