WASHINGTON (AFP) - Former U.S. president Jimmy Carter on Monday called the cutoff of international funds to the Palestinians "counterproductive" and said the US should direct its aid through the United Nations and NGOs.

Speaking on CNN television, Carter said the cutoff of U.S. aid would only strengthen the militant Islamic group Hamas, which recently swept Palestinian elections, while hurting the Palestinian people.

"My concern is that in order to try ... to punish Hamas, we are actually going to be punishing the Palestinian people who are already living in deprivation. And it's going to turn the Palestinian people even more against the West and against Israel and against us. And make Hamas seem to be, you know, their only friend," Carter said.

"I think it's a counterproductive ploy to try to punish Hamas."

The United States had planned to provide some 234 million dollars in assistance to the Palestinians before the Hamas victory, but has put that in doubt and is seeking the return of 50 million dollars already granted.

Carter, U.S. president from 1977-1981, stressed that the Palestinian people were dependent on aid for schools, health care and other social services.

He said that the U.S. could get around laws that prevent it from supporting a Hamas-led government by directing the aid through the United Nations and non-governmental organisations.

US law forbids supporting terrorist organizations, which Hamas has been designated by Washington for its attacks on Israel.

"So we can bypass the Hamas government completely if the United States decides to give humanitarian aid," he said.

"The Palestinian Authority as a government could then go to other sources, to the rich Arab countries, Egypt and others, to make up for what the United States withholds."

Carter also criticized Israel for refusing to turn over to the new government some 50 million dollars a month in taxes withheld for the Palestinian government.

"(The money) doesn't belong to the Israelis, it belongs to the Palestinians. And this money was destined to be used by the government, whoever is in control of it, for teacher salaries, for health care, for welfare workers and so forth, and also to pay policemen. So to withhold the Palestinian money I think is going to be a very damaging thing."

Carter said he believed that Hamas, which has refused to recognize Israel's right to exist, is likely to change as it takes over the Palestinian leadership.

"My belief is now Hamas wants stable, domestically-oriented policies in the government to deal with the problems of the Palestinian people ... My belief is if they are treated fairly, they might very well be less likely to resort to violence."

"Eventually, they are going to have to acknowledge Israel's right to exist and resolve their problems with Israel in a peaceful way. No doubt about that. They cannot escape that international mandate which they have to fulfill."