By Arshad Mohammed and Susan Cornwell
WASHINGTON (Reuters) - Some American Jewish groups are worried about possible U.S. aid cuts to the Palestinians and find themselves in the peculiar position of defending the funding, particularly money that supports Palestinian security forces.
There is some evidence the message is being heard, despite widespread anger on Capitol Hill at Palestinian plans for a statehood drive at the United Nations.
Such aid is seen as crucial to reducing violence and to promoting security cooperation between the Palestinian Authority and Israel. But the U.S. Congress has threatened to review the roughly $500 million in annual aid to the Palestinians if they stick to plans to press their claim for statehood at the United Nations, a step opposed by Israel and the United States.
Of the $513.4 million in Palestinian aid the Obama administration has requested for the year beginning October 1, $113 million would help strengthen Palestinian security forces and improve rule of law in the West Bank.
It is difficult for pro-Israel groups to publicly support maintaining aid to the Palestinians given the Palestinians' stated determination to flout the wishes of the United States.
But at least two groups have explicitly done so -- The Israel Project, which says it has laid out an argument to members of Congress that U.S. security aid should not be cut; and J Street, which has issued a statement defending the aid.
"We have made the case that the security cooperation, which is largely funded and supported by America, needs to continue if we want to see the progress ... in reducing terrorism continue," The Israel Project's president, Jennifer Laszlo Mizrahi, told Reuters.
J Street said last week: "We must make clear to American politicians, particularly in Congress, that being pro-Israel does not require cutting aid to the Palestinian Authority in retaliation for approaching the U.N.
"Such a move will hurt Israel's interests by undermining moderate Palestinian leadership and defunding productive security cooperation," the advocacy and lobbying group said.
Some lawmakers appear to be listening, including House Democratic Whip Steny Hoyer, a staunch supporter of Israel.
He said he would be willing to consider maintaining U.S. security aid to the Palestinians, "particularly if the Israelis felt it was important for their security."
"There are two streams of money -- one's security and one's economic. I think the economic (one) is at greater risk" of getting cut by Congress, Hoyer said on Wednesday.
"We don't want to cut off security money and see a destabilizing of the security in the West Bank that then manifests itself in terms of violence toward the Israelis."
Republican Senator John McCain said Tuesday he would not favor a "blanket" aid cut-off, and spoke highly of money being spent on West Bank police training. And Senator John Kerry, the Democratic chairman of the Foreign Relations Committee, said he would be "very, very skeptical" of cutting aid.
'THE GOOSE THAT LAYS THE GOLDEN EGGS'
Elliott Abrams, a former aide to U.S. President George W. Bush now at the Council on Foreign Relations, said "there are grave doubts about significant cuts in aid to the Palestinian Authority" within American Jewish organizations.
"The security assistance case is more obvious because this ... has been in our national interest and it has also helped Israel a good deal," said Abrams.
"But the doubts extend to the non-security aid as well because the question is: what will happen if the PA collapses? Won't that simply create greater and more difficult responsibilities for Israel?"
Other analysts suggested aid cuts could not only undermine security but also the Palestinian Authority itself and Prime Minister Salam Fayyad, who has reformed its governance.
"He's the goose that lays the golden eggs. With no eggs, I don't think he wants to stick around," said David Makovsky of the Washington Institute for Near East Policy think tank. "That means the person who has been the driving force of security cooperation, the driver of institution building, he is gone."
POSTURING BY PALESTINIANS AND BY CONGRESS?
It is not clear whether the Palestinians will seek approval for their statehood bid at the U.N. Security Council, where the United States has said it will veto it, or seek upgraded status as a "non-member state," which would require a simple majority of the 193-nation assembly.
Abrams and Makovsky advised Congress on Wednesday to wait and see the content of any Palestinian U.N. resolution, as well as what happens after any vote, before slashing U.S. aid.
"Keeping some of your powder dry is probably a good idea," Abrams told the House Foreign Affairs Committee.
But sentiment among lawmakers at the Wednesday hearing was overwhelmingly in favor of cutting aid if the Palestinians persist with their U.N. plans.
"Despite decades of assistance totaling billions of dollars, if a Palestinian state were declared today, it would be neither democratic nor peaceful nor willing to negotiate with Israel," said the panel's chairman, Republican Representative Ileana Ros-Lehtinen.
(Editing by Mohammad Zargham, Doina Chiacu and Bill Trott)