The Treasury Department said on Sunday that the organisation, KindHearts, was connected with the Hamas-affiliated Holy Land Foundation, based in Dallas, and the al-Qaida-affiliated Global Relief Foundation, a Chicago-area charity.

 

The department said KindHearts was based in Toledo, Ohio.

 

The Treasury's action means that US banks must freeze any assets belonging to the group and Americans are barred from doing business with it.

 

Hamas dominates the Palestinian legislature after winning last month's elections and is to form the next government.

 

The United States considers Hamas, which has killed hundreds of Israelis in suicide bombings, a terrorist group.

 

Hamas affiliation

 

KindHearts officials, the Treasury Department said, have co-ordinated with Hamas leaders and made contributions to Hamas-affiliated organisations.

 

Stuart Levey, the Treasury's under secretary for terrorism and financial intelligence, said: "KindHearts is the progeny of Holy Land Foundation and Global Relief Foundation, which attempted to mask their support for terrorism behind the facade of charitable giving."

 

In 2001, the Bush administration froze the assets of the Holy Land and Global Relief foundations. The two charities were unsuccessful in getting the freeze lifted by US courts.

 

Since sweeping the Palestinian elections on 25 January, Hamas has refused to yield to international pressure to renounce violence and recognise Israel's right to exist.