Speaking at the weekly meeting of his Cabinet on Sunday, Israeli Prime Minister Ehud Olmert said he would boycott the new Palestinian government and urged the international community to follow suit. The Cabinet overwhelmingly endorsed Olmert's position.

The Cabinet vote came a day after the rival Palestinian factions Hamas and Fatah installed their new unity government. They hope the alliance will end months of infighting and persuade the international community to lift a year of bruising economic sanctions.

While the coalition's platform is more moderate than that of the previous Hamas-led government, Olmert said it fell short of international demands to renounce violence, recognize Israel and accept past peace deals. He also noted its affirmation of the right to "resistance."

"We can't maintain contact with the government or its ministers when you consider that this is a government that does not accept the conditions of the international community and sees terror as a legitimate goal," Olmert told his Cabinet.

"We expect the international community will not waver ... and will continue the steps that were taken to isolate the government that does not accept the (international) principles," he added.

Olmert said he would maintain contact with the moderate Palestinian president, Mahmoud Abbas, who was separately elected and is not a member of the coalition government. But Olmert said the discussions would be limited to "quality of life" issues, such as improving living conditions for Palestinians.

The Cabinet overwhelmingly endorsed Olmert's position 19-2, Israeli radio stations reported.

New disposition

The new Palestinian administration replaced a year-old government led by Hamas, the Islamic militant group that has killed dozens of Israelis in suicide bombings. It capped months of negotiations interrupted by bursts of violence that killed more than 140 Palestinians between Hamas and Fatah.

Hamas' rise to power last year provoked Western donor nations to cut off aid to the Palestinians. Israel also has withheld hundreds of millions of dollars in taxes it collects for the Palestinians. The sanctions have devastated the Palestinian economy.

At Saturday's parliamentary swearing-in ceremony, Palestinian leaders sent mixed messages about their dealings with Israel. But in sum, they appeared to show a softening of Hamas' stance toward Israel.

The new Palestinian alliance appears to implicitly recognize Israel by calling for a Palestinian state on lands the Israelis captured in 1967, in contrast with Hamas' past calls to eliminate Israel altogether.

It also pledges to "respect" previous agreements with Israel and authorizes Abbas to conduct future peace talks. Any future deal would be submitted to a national referendum, suggesting Hamas would not hold veto power.

Abbas, a moderate who has repeatedly condemned violence and called for peace talks with Israel, has said the deal is the best he can get from Hamas and was needed to avert Palestinian civil war.

"The Israeli position concerning the Palestinian government is unacceptable," Nabil Abu Rdeneh, a top aide to Abbas, said Sunday. "We hope the world community, especially the US and Israel, will deal with this government. This is the only opportunity for peace and stability so far."

The deal also has revealed some divisions within Hamas.

Presenting the government's program to parliament on Saturday, Prime Minister Ismail Haniyeh of Hamas said the alliance would work "first and foremost to establish an independent Palestinian state," with disputed Jerusalem as its capital, on lands Israel occupied in the 1967 Mideast War.

He said the Palestinians maintained the right to resist occupation, but would also seek to widen a truce with Israel, now limited to the Gaza Strip.

Sunday, however, Hamas issued a statement saying the government platform "is totally different than the program of the Hamas movement."

"We call on the national unity government to support the choice of resistance against the occupation and to offer all possible means to confront the continuous aggression against our people," the statement said.

International response

The international community's response will be crucial for the future of the new Palestinian government.

Finance Minister Salam Fayyad warned on Saturday that the new government would not be able to function for long unless the boycott is lifted and financial aid is increased.

"We do face a very serious and crippling financial crisis," he said. "Without the help of the international community, it is not going to be possible for us to sustain our operations."

Israeli officials fear the new government will cause the tough international stance against the Palestinians to crumble. Israel and the US Sunday ruled out a resumption of financial transfers to the Palestinians. But Norway announced it would lift sanctions, and Britain and the UN also signaled flexibility.

The European Union said Sunday it was willing to work with the new Hamas-Fatah coalition government, but the Palestinians must first adopt demands from the Quartet of Mideast peacemakers that include the recognition of Israel.

The EU presidency recalls the bloc's readiness "to work with and to presume its assistance to a legitimate Palestinian government adopting a platform reflecting the Quartet principles," Germany said in a statement.

"The EU will carefully assess the platform and actions of the new government and its ministers," the statement said.

In a sign of hope for the government, Norway, a major donor, said on Saturday it would restore aid to the Palestinians.

However, Israeli and American officials said Sunday the ban on transfers to the Palestinian government would remain in place. The Israeli sanctions are especially painful because the money it has withheld is a major source of funding for the Palestinian government budget.

Micaela Schweitzer-Bluhm, spokeswoman for the US Consulate in Jerusalem, said the Americans were "very disappointed" with Haniyeh's speech. She said he had missed an opportunity to accept the international conditions and make the Palestinians a "partner for peace."

But in a break from the Israelis, she said the US would likely maintain contact with non-Hamas members of the government.

(China Daily via agencies March 19, 2007)