Agence France-Presse CAIRO: Palestinian President Mahmud Abbas said Saturday an EU funding mechanism for the cash-strapped Palestinians was not adequate after a meeting with President Hosni Mubarak in Cairo. The mechanism is I believe not adequate because the funds must go through the government, Abbas told reporters, referring to how under the EU plan the funds are to be channeled away from the Hamas-led government. Though we consider this a step forward, it is not enough at all because it cancels the role of the government and cancels the role of the Palestinian Authority, he said. However French President Jacques Chirac in a telephone call to Abbas assured him that the European Union has set in motion a way to bring aid to the Palestinians. European Union leaders endorsed Friday a new funding mechanism for the Palestinians, expected to take effect next month, through which the EU plans to channel a substantial aid package. The European Commission has been trying to design a mechanism that would funnel much needed funds to the Palestinians bypassing the Hamas-led government. The Islamist movement, which swept to power in March, has rejected Western demands that it renounce violence and recognize Israel and past peace deals. That prompted the European Union, its biggest aid donor, and the United States to suspend direct aid, exacerbating a financial crisis in the territories. Deadly clashes have ensued between supporters of Hamas and those of Abbas defeated Fatah faction. Abbas rejected any talk of naming a new prime minister to replace incumbent Ismail Haniya as a way out of the crisis. It is still too early to talk about this, he said. He said that talks are still in progress between the two sides over a document drawn up by Palestinian prisoners in Israeli jails which proposes a final settlement with Israel of two states living side by side. We are currently in talks, which began in Ramallah and are currently taking place in Gaza to discuss the document of the detainees, Abbas said. The Palestinian president and the Hamas-led government have been locked in crisis since Abbas announced a July 26 referendum on the blueprint, pending a cross-party agreement. The referendum is still a possibility, Abbas said. But it is not our goal, it is better for us and for the Palestinian people if we agree. The document calls for a national unity government, an end to attacks in Israel and the creation of a Palestinian state alongside Israel on land conquered by the Jewish state in 1967. If accepted, the blueprint would undercut Hamas long-time platform of refusing to recognize Israel and bounce it into a coalition government with Fatah. For its part, Egypt chose not to comment on the significance or implications of the referendum. This is an internal Palestinian affair, said Suleiman Awwad, the Egyptian presidency spokesman. Awwad also said that Mubarak, who met with Israeli Prime Minister Ehud Olmert earlier this month, was preparing to host a three-way summit bringing together Olmert and Abbas. He did not say when it would happen. There is communication between Egypt and the Quartet to prepare for a summit in Sharm El-Sheikh like the one that brought together president Abbas and former prime minister (Ariel) Sharon in February last year, Awwad said. Olmert has said he planned to meet Abbas towards the end of June. Peace talks are within the remit of Abbas rather than the Hamas-led government, but Olmert has said the moderate Palestinian leader cannot be used as a fig-leaf for a movement committed to the destruction of the Jewish state. Abbas visit to Cairo came as part of a regional tour that took him to Jordan later in the day. He was to meet with King Abdullah II on Sunday. On arriving in Amman, Abbas said his security forces had still not received an arms shipment Israel had agreed to let be delivered through Jordan despite a top Israeli official s claims to the contrary. We have not received anything, Abbas said in response to a question from a journalist. On Thursday, Israeli parliamentary foreign affairs committee chairman Tzahi Hanegbi said the arms had been delivered overnight.