INTERVIEWER: Jack Straw is in Saudi Arabia. He’s discussing among other things the European Union decision to suspend funding to the Hamas led Government of the Palestinian Authority.

As it happens there’s a Hamas delegation in the Saudi capital, Riyadh, at the same time looking for money to make up the shortfall and a little earlier I asked Mr Straw how he would convince his hosts they shouldn’t help the Hamas Government financially.

FOREIGN SECRETARY: What I’ve done is to explain the position of the European Union which is that we like the Saudi Government have no intention of punishing the Palestinian people for a decision which they did democratically and freely make to elect a Government of, based upon Hamas.

But, we in the United Kingdom, we in the European Union have responsibilities to our tax payers. We have to be assured that money which we have been paying up to now in very large quantities, and the European Union including the United Kingdom, is the largest donor of all to the Palestinian Authority, that money is going for the purposes intended. For example, to pay teachers, doctors, nurses and security personnel and is not going to be filtered in to an organisation which, by its own (indistinct) partly funds terrorism.

That’s the issue for us and what we’re also, let, let me say this too about half the money which the European Union and the United Kingdom has been paying continues to be paid because that goes to United Nations agencies and non governmental organisations. Hilary Benn and I are actively looking at ways in which we can assure the other half of the money can safely go to the purposes intended.

INTERVIEWER: But as we understand it, Hamas are in town too. They want the Saudi Government to make up the shortfall left by the fact that the European Union is no longer going to be providing the funds that it did. You’re quite happy are you to see the Saudi Government do that?

FOREIGN SECRETARY: That’s a matter for them. They’ve got to make their own decisions about (indistinct) …

INTERVIEWER: (Indistinct) but you must have a view on it …

FOREIGN SECRETARY: …but the truth is that the European Union and the United Kingdom are such large donors that it’s very unlikely in practice that any of the other donors in the region are going to be able to make up the shortfall. Moreover, what we’re seeking to do is buy a temporary suspension of our funding of the Palestinian Authority to secure some change in approach by that Authority.

It is our hope that we can resume the funding of the Palestinian Authority. That’s also the hope of the European Union. But there has to be some movement by the new Palestinian Authority and some recognition that with the power of Government which they now have goes responsibilities and those responsibilities include an understanding you can not have a democratic Government which at the same time is sponsoring and supporting terrorism. And that there has to be some contin, continuity of Government and that includes a recognition of the fact that Israel exists, not a celebration of that by any means, and to a continuation of the agreements that the Palestinian Authority’s entered in to.

INTERVIEWER: Yes, sorry to pursue this but if that’s your objective then surely the objective is undermined if Saudi Arabia gives money to Hamas.

FOREIGN SECRETARY: Well Saudi’s always given money to Hamas and there’s nothing new in that. We are not, and I, I just say that because of the size of the funding that has come from the European Union and United Kingdom. We are ourselves the second largest bilateral donor and always have been after the United States, it is unlikely that other states in this region will in fact fill the shortfall. So I understand the point you are making to me but I don’t in practice think it’s going to be an issue.

[IRAN’S NUCLEAR PROGRAMME]

INTERVIEWER: On another front, are your hosts worried by what’s happening in Iran?

FOREIGN SECRETARY: Yes, there’s always been concern in Saudi Arabia and in the Arab world about problems in Iran. I’ve talked at great length to Prince Saud al Faisal and indeed to Crown Prince Sultan who I saw earlier yesterday about the situation in Iran. I was able to brief Saudi Government representatives about the work of the so called E3, the Germany, France and the United Kingdom and the meeting of our political directors which has taken place in Moscow yesterday.

INTERVIEWER: That meeting considered the question of what to do next if Iran doesn’t bow to pressure from the Security Council. I can think, of no single serious commentator who suggests they will.

FOREIGN SECRETARY: Well we’re working on the basis that Iran will not meet the proposals from the Security Council or the, the thirty day deadline but…

INTERVIEWER: So what next?

FOREIGN SECRETARY: …negotiating with the Iranians takes a kind of rondo form so you never quite know what’s going to happen. But what would be most likely to happen is the matter will move back to the Security Council and there’ll then be discussions about the next steps which the international community will take. But we have to wait …

INTERVIEWER: There’s no sign of any bending at all is there?

FOREIGN SECRETARY: Well they have responded more than I think people see. For example they were threatening total withdrawal from the operation of the Inspectors. That actually hasn’t happened. I think Iran is feeling some of the pressure as well as its President making belligerent statements.

What we will wait for here is the report from Dr Mohammed ElBaradei, the Director General of the International Atomic Agency. See what he says about Iran’s compliance or non compliance with the obligations imposed on it by the IAEA and then consider the next steps that we will take.

But the Iranians need understand this - that at each stage they have calculated they can split the international community. At each stage, although it has taken a lot of work, they’ve simply ended up with [the] international community more united in its concern to ensure full compliance by the Iranians. And that actually is of great concern to many more sensible Iranians. I note the recent remarks by former President Rafsanjani in that regard.

INTERVIEWER: Well they have split the (indistinct) international community a bit haven’t they? You have always been absolutely categoric on the question of military force. You said it’s inconceivable. The White House refuses to rule it out.

FOREIGN SECRETARY: I don’t regard that in practice as a split. I obviously understand that there’s a difference of, of use of words there (indistinct) …

INTERVIEWER: What is it then?

FOREIGN SECRETARY: Well because in practice I, I’ve always acknowledged that the United States Government formally is in a different position from that of the European Governments on this theoretical issue about the use of force. But in practice both the Americans and the Europeans and Russia and China are committed to finding a diplomatic solution to this issue.