Note that I'm *not* suggesting economic sanctions against any party, here. What I *am* suggesting is that maybe we shouldn't be paying these guys to fight (which is what a policy of supplying either Tel Aviv or the Palestinian Authority with free money from the US does).
RE,

I would apply a different wrinkle on assistance. When signed Camp David was a geostrategic breakthrough because it removed the Israeli-Egyptian struggle from the Cold War game board; we paid for them not to fight and at the time (1978) that was a good thing. In 2006, I believe that across the board, all assistance and development monies should be on an established schedule according to need as set by an international body like the Wold Bank. That would be hard thing for a lot of folks to get used to--many of whom who see assistance as leverage and many who seek such assistance with no intention of accepting such leverage. As an influence and image tool, assistance according to need gets us more for each buck. The tsunami relief effort, the Pakistan earthquake, and other such actions completed without agenda do more as a global IO tool. Put another way, apolitical assistance I believe is more effective politically than the pursuit of political leverage through assistance.

But I will also say that in my experience, the absolute worst tactic is to hold out assistance until a recipient complies--especially if the perspective assistance recipient is truly in need. In some ways I see that in our reactions to Hamas; we stated our "new" policy was to encourage democracy. The Palestinians voted and Hamas won. We said recognize Israel or we cut off funds. Israel had already labeled Hamas a terrorist organization and refused to deal with it. Big surprise, Hamas said no to recognition and we suspended funds. Though of economic importance certainly to the Palestinians, the amount of money compared to that routinely directed to Israel without condition made the face issue to the newly victorious Hamas more important.

In the case of the post-genocide Rwandan government the assistance issue was even more convoluted. The new government (that stopped the genocide) could not get World Bank help until arrears on loans to the old government (the one that planned the genocide) were paid. France played a large role in blocking UN and European assistance to the new government until that government proved it sought to preserve human rights and justice. The same French government was closely aligned with the old government and helped train the folks who committed genocide. Meanwhile the UN, the US, and the West poured relief monies into assisting the "refugees" who were responsible for genocide. The last figure I heard for the Int Tribune for Rwanda was that the court would try less than 100 people for genocide at a cost of $25 million per conviction. Rwanda with well over 100,000 prisoners in its jails could not get funding to speed justice because it the existence of the prisoners and the poor conditions was used as a sign the new government was not committed to human rights. And if it released those same prisoners and they were killed out of revenge, then the issue of revenge killings was also raised as a human rights issue to block assistance.

It was rather like a bizarre marriage of Catch 22.
"Do you think you are crazy, Yosarian?"
"Yes, I do"
"Then you are not because this war would drive anyone crazy. Anyone who thinks he is crazy is not. Anyone who thinks he is sane is crazy."
and
Have you stopped beating your wife?
then applied to foreign assistance.

best,
Tom