Israel moved to reinforce its measures against the new Hamas-led Palestinian government, declaring it a "hostile entity" and ruling out contacts, including peace talks with moderate Palestinian President Mahmoud Abbas.
The Sunday declaration by the Israeli Security Cabinet rejected the idea of using Abbas to bypass the new government and boosted acting Israeli Prime Minister Ehud Olmert's plan to impose a border in the West Bank by 2010.
The recommendation came amid increasing Israeli military pressure on Hamas in response to Palestinian rocket attacks on southern Israel.
Israeli forces pounded suspected launching sites in the northern Gaza Strip with artillery fire on Sunday, killing a Palestinian police officer and wounding 16 other people. The Palestinian government called an emergency meeting to discuss the growing tensions.
Israel has refused to deal with Hamas, demanding that it halt violence, recognize Israel and accept previous interim peace agreements. Israel has also suspended the transfer of US$55 million in tax revenues it collects for the Palestinians, dealing a tough blow to the cash-strapped Palestinian government.
Hamas has rejected the ultimatum, despite intense international pressure and a growing financial crisis, though some leaders have hinted at a readiness to moderate.
In a statement, Israel's Security Cabinet, made up of senior ministers, said there will be "no personal boycott" of Abbas, but rejected any substantive negotiations with the Palestinian leader.
Government spokesman Asaf Shariv said relations with Abbas would be limited, and peace talks were out of the question. The recommendations were to be approved by the full Cabinet next Sunday, he said.
"The Palestinian Authority is one unit and does not have two heads," the statement said, adding that Israel will work to undermine the Palestinian government. It also said Israel will boycott diplomats who have contact with Hamas.
Nabil Abu Rdeneh, a spokesman for the Palestinian president, said Israel should negotiate with Abbas, who is the head of the Palestine Liberation Organization (PLO), because Israel signed its agreements with the PLO. Abu Rdeneh said Israel should not "look for any pretext for escaping from the negotiating table."
The policy could give more momentum to Olmert, who plans to draw a border in the West Bank unilaterally by 2010 if he believes a peace accord is impossible.
Under Olmert's plan, Israel would withdraw from large parts of the West Bank, but retain and strengthen major settlement blocs. The plan would fall far short of Palestinian claims to all of the area.
Speaking to Kadima activists on Sunday evening, Olmert said, "We want this government to be able to fulfill within the coming four years the obligations it took on itself in the political and security areas ... to bring Israel to a safe refuge of peace and final borders."
Meanwhile, Israel will allow a portion of the tax revenues it withholds from the Palestinian Authority to be used to pay Palestinian debts to Israeli utility companies, Israeli officials said yesterday.
The Israeli government decided in February to halt tax revenue transfers, estimated at US$50 million to US$60 million per month, to the Palestinian Authority to isolate Hamas after its election victory in January.
Collected by Israel on behalf of the Palestinians, the money was used by the Authority to pay salaries and other expenses.
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