Khaled Meshaal, the exiled leader, said the Islamist movement had not changed its stance now that it was in government in the Gaza Strip and the occupied West Bank.

"We do not promise our people to turn Gaza into Hong Kong or Taiwan, but we promise them a dignified and proud life behind the resistance in defence of their honour, their land and their pride," Meshaal said on Al Jazeera from Beirut.

"Our battle is only against the Zionist occupation."

One of the first challenges for Ismail Haniya, the prime pinister, and his cabinet - sworn in on Wednesday after winning January elections - will be paying salaries for March for 140,000 Palestinain Authority (PA) staff that is due within days.

Israel, where Ehud Olmert, the interim prime minister, is building a coalition after his Kadima party won polls this week, but took less than a quarter of seats in parliament, has withheld monthly Palestinian tax transfers of $50 million-$55 million.

Diplomatic cut-off

On Wednesday, the US ordered its diplomats and contractors to have no contacts with Palestinian ministries, and Canada suspended aid to the Palestinian Authority.

Hamas has rebuffed demands from the Quartet of Middle East peace mediators to recognise Israel, renounce violence and abide by peace accords or risk losing vital aid.

Mark Regev, the Israeli Foreign Ministry spokesman, said an "unreformed" Hamas was not a party for dialogue.

Arab League countries have
vowed to financially back PA

"If through their stubbornness and short-sightedness and extremism, they isolate the Palestinian government and turn it into a pariah in the international community, they will have no one to blame but themselves," Regev said.

Salaries for Febuary to 140,000 PA workers, including security personnel, were paid weeks overdue.

In Ramallah, Jihad al-Wazir, senior finance ministry official, said PA staff should get their March salaries by mid-April.

Algeria deposited $34.5 million into the PA's account on Thursday, Wazir said. More money was expected from Saudi Arabia, Russia, Kuwait and the United Arab Emirates.

The Palestinian Authority relies on more than $1 billion in foreign aid each year.

Hostile countries

Mahmoud al-Zahar, who assumed the post of foreign minister in Gaza, told his staff not to have contacts with "hostile" countries and those that cut aid.

Olmert's centrist Kadima party won Tuesday's election on plans to set Israel's final borders within four years with or without the agreement of its Palestinian neighbour.

Olmert has threatened to take
unilateral separation steps

While he has slammed the unilateral plans, Abbas telephoned Olmert on Thursday to congratulate him on his election win.

An Olmert spokesman said the conversation did not touch on scheduling talks between the two. Saeb Erikat, the Palestinian negotiator, said Abbas expressed his willingness to resume final-status peace talks.

In the absence of negotiations, Olmert has vowed to draw Israel's permanent frontier by 2010 by removing isolated settlements in the occupied West Bank and expanding bigger ones.

That would displace tens of thousands of settlers.

Palestinians say such a move would annex land and deny them the viable state they seek in the West Bank and Gaza Strip.

Olmert's Kadima party fared worse than predicted in the Israeli elections, taking 28 of parliament's 120 seats. Coalition talks are expected to last weeks.