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Middle East: West Cuts Back Relations As New Palestinian Government Takes Office --> Ismail Haniyah (file photo) (epa) PRAGUE, March 30, 2006 (RFE/RL) -- Even as Prime Minister Ismail Haniyah's Hamas-led government takes office, it faces a host of problems over Hamas's refusal to recognize the existence of Israel.

"This government will remain loyal to the rights and the red lines [requirements] of the Palestinian people and will go forward in accordance to the achievement of the goals and dreams and aspirations to erect the Palestinian independent state with Jerusalem as its capital and to liberate the prisoners and to assure the right of return, thank you and God's mercy and blessings be with you," new Palestinian Prime Minister Ismail Haniyah said as he was sworn into office on March 29:

Haniyah is a top Hamas official and his statement in Gaza City was essentially a summary of the party's goals. That made it clear Hamas has no intention of modifying its platform of resistance to Israel that swept it to power in January's parliamentary elections.

The Islamic militant group does not recognize Israel as a state and claims credit for carrying out nearly 60 suicide bombings against Israelis since 2000.

It also rejects the internationally brokered Israeli-Palestinian peace process. However, Haniyah has recently suggested his government might agree to a long-term truce with Israel as an alternative.

Western Pressure

Now, as the new government starts work, the question is how long it can resist pressure from many Western states to change its views.

Washington raised the stakes on March 29 by ordering its diplomats and contractors to cut off contacts with Hamas-appointed government ministers and those who work for them -- though it said humanitarian aid would continue.

The U.S. administration also sought to draw a distinction between the new cabinet and Palestinian Authority President Mahmud Abbas. Washington said contacts will still be permitted with Abbas, who is a member of the secular Fatah party, and non-Hamas members of the parliament.

Abbas said on March 29 that he does not know what Hamas's ultimate position will be, but he remains ready to negotiate peace with Israel.

"We are not in the midst of this topic I don't know if they [Hamas] will accept or not [to negotiate with Israel], but we are ready to negotiate with the Israelis and we are ready and we insist on this, on the basis of international consensus and the road map," Abbas said.

Canada, too, has announced it will suspend all contacts and financial aid to the Hamas-led government.

The cut-offs come as the European Union has also said in recent weeks that will only work with Hamas if it commits to peace. The EU is the largest foreign-aid supplier to the Palestinians, giving some $600 million annually.

Money Crunch

The aid questions are pressing because one of the first challenges the new government must meet is paying salaries to its some 140,000-strong workforce. Israel has cut off monthly tax transfers of some 50 million dollars that usually are tapped for this purpose.

A top Iranian official, Supreme National Security Council Secretary Ali Larijani, said last month that Tehran "will definitely help [a Hamas-led] government financially in order to resist America's cruelty." But there has been no public follow-up to the pledge.

Meanwhile, this week's Arab League summit in Khartoum, Sudan, maintained current Arab funding to the Palestinian Authority at $55 million a month -- despite Palestinian calls to raise it to three times that amount.

Peace, With Or Without You

Many analysts say it is too early to say whether the financial pressures alone could force Hamas to modify its view of Israel. But the pressure – like this week's parliamentary election results in Israel -- cannot fail to underline the costs for the Palestinians of staying out of the internationally backed peace process.

The biggest winner in the March 28 Israeli elections was the Kadima (Progress) party, which campaigned on taking unilateral steps to separate Israel from the Palestinians. It will now be the dominant partner in Israel's next coalition government.

Some analysts predict that the new Palestinian and Israeli governments will have to find a way to cooperate in some form even if they want to ignore one another.

Gershon Baskin, director of the Israeli-Palestinian Research and Information Center in Jerusalem, told RFE/RL's Russian Service that this could happen, in part, due to the interconnections between the Israeli and Palestinian economies. But he says it could also happen for security reasons.

"The daily life, the economic issues, the border crossings, the workers in Israel, the tax monies that Israel is collecting, even possibilities for contacts and relationships at the field level between security officers," Baskin said. "It seems that Hamas will move in the direction of trying to create better law and order on the Palestinian streets, which means they will have to deal with all the unauthorized weapons that are in the hands of Palestinian groups, forces, militias, [and] gangsters."

Baskin said such moves could be perceived as "positive steps toward creating a better security situation" and could enable Israel to open up "nonofficial" or "nonpolitical" contacts with the Hamas-led government.

If so, that would be a start, at least, toward getting the two sides back to the international road map toward a negotiated peace settlement. The peace process is currently frozen.

(RFE/RL Russian Service correspondent Irinia Lagunina contributed to this report.)