Belgium ? Hoping to prevent a humanitarian crisis in the Palestinian territories, European Union leaders agreed Friday to channel aid to cash-starved Palestinians for health care, utilities and social services while still maintaining a funding freeze on the Hamas-led government.

The 25-member bloc was considering an initial allocation of about $126 million, spokeswoman Emma Udwin said. She said the EU wants to have the funding mechanism in place by early July.

An EU statement said the plan was drawn up in consultation with the United States, Russia and the United Nations, who agreed with the EU in May that a mechanism had to be found to keep the Palestinian economy afloat after most international aid was cut off following Hamas’ January election win. The United States and EU consider Hamas a terrorist organization.