By Andrew Duff MEPTHE search for a distinctive European identity goes on. Europe's current set of external challenges helps. The most immediate problem is presented by the victory of Hamas in the Palestinian elections.

By Andrew Duff MEP

THE search for a distinctive European identity goes on. Europe's current set of external challenges helps. The most immediate problem is presented by the victory of Hamas in the Palestinian elections.

The Americans have taken the predictable line, by refusing to deal with Hamas and cutting off badly needed financial aid from the Palestinian Authority. They will not re-engage, they say, unless Hamas renounces terrorism and recognises the state of Israel. All well and good - except that, if the Europeans followed suit, the struggling Palestinian entity would collapse and the power of Hamas would grow.

Fortunately, the EU line is not so simplistic as that of the USA. Neither do we blindly follow the dictates of the Israeli government. Nor should we.

Humanitarian reasons demand that the EU should continue to help the Palestinians as much as possible, using President Mahmoud Abbas and NGOs as the main channels of aid. Strategic reasons also suggest that the EU should be the main patron of the emerging Palestinian state.

Moral reasons encourage a fair-minded approach between different Arab countries. The West has perfectly normal commercial and diplomatic relations with Saudi Arabia and the Gulf states, none of which officially recognise the state of Israel.

Further East, Iran, not for the first time in its history, challenges the Western presumption about the smooth advance of the values of the Enlightenment. Iranian President Ahmadinejad has written a long letter to George W. Bush in which he proposes a return to the time of the prophets. But this is deceptive. Iran is very much part of the era of globalisation, making important new connections with China and India as well as pursuing its nuclear ambitions.

Russia presents the EU's third headache. President Putin insists that his country's recent emergence as a market economy obliges him to charge commercial prices for its oil and gas exports. Accusations from Europe that Russia is suddenly playing politics with its energy industry are wide of the mark: that is precisely what the old Soviet Union used to do, and which Gazprom is now undoing.

While these international problems pile up, the leadership of the Union remains in some confusion. Europe's governments, working together within the Union, need to be more coherent and intelligent. Fortunately a new set of European leaders is appearing in the nick of time: inside two years, Germany, Italy, France and Britain are having new governments. Let's hope they bring new wisdom.

Andrew Duff is the Liberal Democrat MEP for the East of England. www.andrewduffmep.org