"We will eat cooking oil and olives," a defiant Haniya said on Friday of the Palestinian people, who elected Hamas to power in a landslide election in January.

Haniya said the US and its allies were mistaken if they thought the newly sworn-in government would fall in four to six weeks because of the aid cuts.
   
"This government will continue for the full four years," Haniya said at Gaza's biggest refugee camp, where poverty and unemployment were rampant long before the European Union and the US froze direct assistance to the Palestinian Authority.

Thousands of supporters at the camp chanted Haniya's name in unison.

They criticised the US, the EU, and Israel which has cut off tax revenue transfers, screaming: "Shame on you."

Speaking through a loudspeaker, a Hamas activist said: "If our people starve, we will blow up our bodies in the depths of the Zionist entity."

Empty coffers

Hamas says it inherited a Palestinian Authority (PA) with empty coffers and more than $1.3 billion in government debts.

Unable to pay March salaries to 140,000 government workers, Hamas has stepped up appeals to Arab states to make up for the loss of Western funds.

Omar Abdul Razak, the Hamas finance minister, said without that money, the Palestinian economy could collapse in three to four months, and that this would cause a humanitarian critical situation and chaos.

Like the US, the EU has severed political contacts with the Hamas-led PA.

Abbas: The common man should
not be punished by the EU

In his speech, Haniya said some countries in the EU had made contacts with the Hamas government, but he did not identify the countries by name.

"The aim of these pressures and this siege is to win political concessions. They will not win political concessions from us that will harm the rights of our people," Haniya said.
   
"We won't surrender, and all the attempts to isolate the government will not succeed," he said.

Also on Friday, Mahmoud Abbas, the Palestinian president, asked Morocco's King Mohamed VI to take up with the EU the issue of resumption of aid to Palestinians, Al Jazeera reported.

Concluding a visit to Morocco, Abbas said that the aim of the EU in deciding to block all financial assistance to the PA, would have been to see the collapse of the body.

Dealings barred

The Bush administration has barred Americans from having business dealings with the Hamas-led PA, warning violators could face sanctions, according to a US Treasury Department document.

"Transactions with the Palestinian Authority by US persons are prohibited, unless licensed," the document said, giving private citizens and organisations 30 days to terminate ongoing contracts and programmes with the PA.

"The aim of these pressures and this siege is to win political concessions. They will not win political concessions from us that will harm the rights of our people. We won't surrender ... "

Ismail Haniya
Palestinian Prime Minister

The Bush administration made an exception for the World Bank, the International Monetary Fund, and UN aid agencies, authorising them to engage in "activities and transactions" with the PA, the document said.

As he spoke, Mahmoud al-Zahar, the Palestinian foreign minister,  began a fund-raising tour of Arab states. The two-week trip includes stops in Egypt, Jordan, Saudi Arabia, Bahrain and Kuwait.

Hamas, meanwhile, launched an appeal for private donations on its website in a bid to close a funding shortfall which has seen its  government unable to pay the Palestinian Authority's 140,000  employees.

"To help your Palestinian brothers resist and foil the Zionist  plot aimed at forcing them to abandon their legitimate national  rights, we urge you to make a donation to the Palestinian people," said the online appeal.

The announcement asked donors to send their cash to one of two  bank accounts in Egypt.