JERUSALEM,(Reuters) – International envoy to the Middle East James Wolfensohn has decided to step down because of restrictions on his role now that Hamas is in control of the Palestinian Authority, officials said on Friday.

“His term is expiring at the end of the month and he has no intention of remaining,” an official in Wolfensohn’s office said, adding that no formal announcement was planned.

The Quartet of Middle East mediators — the United States, the European Union, Russia and the United Nations — appointed Wolfensohn a year ago to help coordinate Israel’s withdrawal from the Gaza Strip and to spearhead rebuilding efforts there. “He is leaving without realising his vision of a comprehensive developmental plan in Gaza,” said Saeb Erekat, a senior aide to Palestinian President Mahmoud Abbas.

Wolfensohn’s departure expands a diplomatic vacuum after the United States, the European Union and Israel severed contacts with the Palestinian Authority.

U.S. officials have told Palestinian officials that there is little chance Quartet partners will agree to appoint a new envoy anytime soon.

Hamas, whose charter calls for Israel’s destruction, has been struggling since assuming control of the Palestinian Authority a month ago to secure the funds to pay overdue salaries to 165,000 workers and to keep ministries running.

As many as one in four Palestinians are directly or indirectly dependent on wages from the Authority, prompting Wolfensohn to warn of the risk of economic collapse and chaos.

“What would a Quartet envoy do?” said a Western diplomat close to Wolfensohn. “You can’t do economic development in a vacuum.”

A big part of Wolfensohn’s job had been raising funds for the Palestinian Authority. But U.S. policy now calls for isolating the Authority diplomatically and economically.

Wolfensohn had threatened to quit because he said his mandate and backing were unclear after Hamas won parliamentary elections in January.

The Quartet has called on Hamas to renounce violence, recognise the Jewish state and abide by past peace deals. But divisions within the Quartet have remained over cutting off contacts and aid to pressure the Islamic militant group.

The United States and the EU have frozen direct aid to the Hamas-led Palestinian Authority. But Russia has brushed aside pressure from the United States and Israel to shun Hamas and has called the decision to cut off funding to the Palestinian government a mistake.

French President Jacques Chirac, who met with Abbas in Paris on Friday, said he supported a resumption of direct aid to the Palestinians and would lobby the EU to back the change.

U.N. officials have also expressed concern that a cut-off in direct assistance to the Palestinian Authority could trigger a humanitarian crisis and hobble the very institutions that would be needed to run any future Palestinian state.

Western diplomats said the EU, Russia and the United Nations had pushed to extend and expand Wolfensohn’s mandate, but ran into resistance from some top U.S. officials.

Wolfensohn’s mission officially runs through April 30. The Quartet did not rule out giving him another extension.

The United Nations, which has its own Middle East envoy, could try to fill the diplomatic void. But the world body has advised its agencies to avoid meeting Hamas political leaders unless such contacts were required to conduct their humanitarian work.