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Last Updated: Monday, 20 February 2006, 09:51 GMT
Hamas dismisses Israeli sanctions
Hamas posters in Gaza
Hamas' resounding election victory is worrying Israel and donors
Palestinian Prime Minister-designate Ismail Haniya has dismissed the effect of Israeli financial restrictions on the Palestinian Authority (PA).

Mr Haniya told the BBC that Arab and Islamic states would offset a drop in Western aid and said Hamas would not disarm and recognise Israel.

Palestinian leader Mahmoud Abbas is due to meet Hamas leaders and is expected to ask Mr Haniya to form a cabinet.

On Sunday, Israel approved a series of punitive measures against the PA.

Hamas, which won last month's Palestinian election, has carried out suicide bombings against Israel in recent years, although it has been observing an informal truce since last year.

Ismail Haniya
We have other Arab and Islamic countries and members of the international community who are ready to stand next to the Palestinian people
Ismail Haniya

The EU, the biggest donor to the PA, has threatened to stop funding unless Hamas recognises Israel and renounces violence.

Mr Haniya told the BBC he regretted that Israel had labelled Hamas a terrorist group, adding that "it should have responded differently to the democracy expressed by the Palestinian people".

Regarding the withholding of foreign aid, he said: "The West is always using its donations to apply pressure on the Palestinian people."

He said the Palestinians had "lots of alternatives".

"We have other Arab and Islamic countries and members of the international community who are ready to stand next to the Palestinian people."

Financial concern

Mr Abbas said on Sunday the PA was in a "real financial crisis" after Israel said it would stop collecting customs revenues on the Palestinians' behalf.

Hamas should adopt the way of dialog with Israel
Mumtaz Abbasi, Muzaffarabad

"The pressures have begun and the support and the aid started to decrease," he said.

Former US President Jimmy Carter, who led a team to observe the recent election, criticised Israel's actions, which he said would present "significant obstacles" to an effective PA government.

Writing in the Washington Post, Mr Carter reprised US news reports - denied last week - that the US and Israel have colluded in an effort to disrupt Hamas' accession to power.

"The likely results will be to alienate the already oppressed and innocent Palestinian, to incite violence, and to increase the domestic influence and international esteem of Hamas," he wrote.

Israel's acting Prime Minister Ehud Olmert has said Israel would "not hold contacts with the administration in which Hamas plays any part - small, large or permanent".

The measures he announced include:

  • Withholding monthly tax payments to the PA.

  • Increased security checks at crossings between Israel and the Gaza Strip.

  • A ban on the transfer of equipment to Palestinian security forces.

  • Tightening restrictions on the movement of Hamas officials.

  • Asking foreign donors to stop all payments to the PA.

Israel would however allow humanitarian aid to reach the Palestinians, Mr Olmert said.

The row over Palestinian finances came amid renewed violence in the West Bank.

Israeli troops operating in the centre of Nablus killed two suspected militants, Palestinian sources said. Four others were injured in fighting.

The Islamic Jihad militant group, responsible for recent suicide bombings in Israel, said one of the men killed was its senior commander in the West Bank.

The killings came a day after two other Palestinians died in clashes in Nablus, and two suspected militants were killed in Gaza.

Watch an interview with new Palestinian PM Ismail Haniya

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