By Adam Entous
JERUSALEM (Reuters) - The United States will boycott all Palestinian unity government ministers, including non-Hamas members, unless international demands on policy toward Israel are met, a Palestinian official and diplomats said on Thursday.
Some U.S. officials had been advocating a shift in Washington's position that would allow limited diplomatic contacts with cabinet ministers from moderate President Mahmoud Abbas's Fatah faction and other parties.
But a senior Palestinian official said: "The Americans have informed us that they will be boycotting the new government headed by Hamas. The Fatah and independent ministers will be treated the same way that Hamas ministers are treated."
Diplomats familiar with discussions on the issue confirmed Washington's intention to shun members of the unity government unless it satisfied international calls for Hamas to recognize Israel, renounce violence and accept interim peace accords.
U.S. contacts with Abbas would not be affected although diplomatic sources said relations have been strained by his power-sharing deal with Hamas Islamists, a pact that fell short of meeting the demands for the policy changes.
U.S. officials declined to comment and said Washington was waiting to see how a new government would shape up.
Abbas will attend a summit on Monday with U.S. Secretary of State Condoleezza Rice and Israeli Prime Minister Ehud Olmert.
The Palestinian president was expected to hold talks in Gaza later in the day with Prime Minister Ismail Haniyeh of Hamas to try to resolve problems holding up the formation of a unity administration agreed in negotiations in Saudi Arabia last week.
Abbas abruptly put off an address he was due to give on Thursday about the new government. An official said the delay was due to a dispute with Hamas.
"Hamas has made several unacceptable conditions which cannot be implemented. The Mecca agreement cannot be re-interpreted and must be implemented immediately without any conditions," a Palestinian official said.
Ghazi Hamad, spokesman for the current Hamas-led government, said on Israeli Army Radio "there are a lot of problems". He cited the naming of an interior minister, a post that oversees security services, as one of them.
Another unresolved issue is the fate of Hamas's 5,600-member "executive" police force. Fatah is pushing for the force to be broken up but Hamas wants to keep it together.
Fighting between Hamas and Fatah killed more than 90 Palestinians between late December and early February. Both movements cited the violence as a key motive for pursuing a power-sharing pact.
A ban on direct Western financial assistance since Hamas came to power in March has pushed the Palestinian Authority to the brink of financial collapse.
Complicating matters for any incoming government, top Palestinian bank officials said they would not resume transfers to the government without assurances from the United States.
Western diplomats said they doubted such assurances would be forthcoming. Regional and international banks have refused to transfer funds to the Hamas-led government since March for fear of running foul of U.S. sanctions.
Funds have been permitted to go through Abbas's office.
"We are waiting to see if the U.S. will approve the unity government. Nobody is going to jeopardize long-term contacts with the West. It (U.S. authorization) has to be very clear," said the head of a major Palestinian bank.