"We will not allow Hamas to take part in the elections," Foreign Minister Silvan Shalom told public radio in an interview on Wednesday from New York, where he has been attending the UN General Assembly.
"From our point of view, there will be no assistance nor aid [to the Palestinian Authority] if Hamas - which calls for the destruction of Israel and refuses to recognise the state of Israel - participates," he said.
A Foreign Ministry official said that while Israel had no intention of reoccupying cities in the West Bank, it would not ease roadblocks or facilitate voting in East Jerusalem if Hamas stands.
"We will not cooperate and we will not make things easy as we did in January for [Palestinian Authority President] Mahmoud Abbas' election, when we earned praise from international observers," said the official.
Prime Minister Ariel Sharon has acknowledged that Israel can do little to disrupt the elections in Hamas' Gaza Strip stronghold after ending its 38-year military occupation there last week.
Asked at a news conference on Tuesday about earlier threats by Sharon to disrupt the 25 January polls in the West Bank if Hamas stands, US Secretary of State Condoleezza Rice urged full cooperation.
US Secretary of State Rice has
urged the elections to go ahead
"We would hope that the elections can go forward and that everyone will cooperate to make those elections go forward because elections are fundamental to the continued evolution and development of the Palestinian process," she said.
Rice reiterated the US view that there was a "fundamental contradiction" between Hamas' armed activities and its plan to run in January's poll.
But she added: "We understand that the Palestinian political system is in transition, that it is in transition toward a democratic system and that has to be a Palestinian process."
Hamas, behind the majority of anti-Israeli attacks during the course of the more than four-year Palestinian uprising, did not stand in the first legislative elections a decade ago over its opposition to the Oslo autonomy accords.
However, its strong showing in recent municipal elections has persuaded the group to stand in the second legislative elections and try to end the long domination of the governing Fatah faction.
Despite the threat posed by Hamas to Fatah's dominance, Abbas has warned Israel against interfering in Palestinian affairs.
Shalom, however, cited a statement read out by UN Secretary-General Kofi Annan on behalf of Russia, the United Nations, European Union and United States - the so-called Quartet - that said, "Ultimately, those who want to be part of the political process should not engage in armed group or militia activities."
"We will not allow Hamas to take part in the elections ... there will be no assistance nor aid [to the PA] if Hamas participates"
Israeli foreign minister
"The Quartet published a most positive statement in which it said that no terrorist organisation can participate in the political process while it takes part in terrorist operations," Shalom said.
Hamas is observing a truce but has refused to hand over its weapons after the Israeli pullout from Gaza, saying it will not disarm until Israel has been forced out of all Palestinian land.
Meanwhile, Israel announced that it would not allow a seaport to be built in the Gaza Strip, unless it could control all incoming and outgoing shipments, a junior minister responsible for economic negotiations with the Palestinians said.
"We will not let this port be an open port no matter what. We want to control what comes in and what goes out," Haim Ramon told Israeli public radio.
"If we can't reach an agreement on security arrangements, this port will not be built," said the minister from the left-wing Labour Party.
Discussions between the Israelis and the Palestinians, brokered by international mediator James Wolfensohn, have yet to yield agreements on a port, the reopening of Gaza's airport and land crossings to Egypt and the West Bank.