Use of cash as lever denied

JERUSALEM - Hamas yesterday denounced the Governments of US and Israel for "interference" and "collective punishment" after a report that they were discussing ways of using a halt to funding to oust it from power this year.

Israel and the US denied they had a deliberate plan to force new elections in the hope of an early end to Hamas' majority in the Palestinian Legislative Council which meets for the first time on Sunday.

But Israel in particular did nothing to dispel the idea that it was in favour of cutting off funding from a Hamas-controlled Palestinian Authority unless the faction agreed to recognise Israel, renounce violence and abide by previous agreements between Israel and the PA.

The New York Times quoted unnamed "officials and diplomats" as saying that the intention was to starve the PA of money and international contacts to the extent that several months from now Palestinian President Mahmoud Abbas would be forced to call new elections which would then return a reformed Fatah to power.

The paper said the strategy was to force Hamas to choose between altering its long-held stances or face international isolation and collapse.

But State Department spokesman Sean McCormack said: "There is no plan, there is no plot."

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