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Israel to consider Palestinian sanctions

Cabinet meets following Hamas-led Palestinian parliament session

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RAMALLAH, West Bank (CNN) -- The Hamas-led parliament was sworn in Saturday during ceremonies in Ramallah and Gaza City, officially removing the ruling Fatah Party from its decades-long position of prominence in Palestinian politics.

The focus now turns to the fate of the Palestinian people, who overwhelmingly elected Hamas last month to rule them and now may be looking down the barrel of sanctions from the United States and Israel.

On Friday, acting Israeli Prime Minister Ehud Olmert was briefed on sanctions his nation could enact once the Palestinian parliament is sworn in.

Barring thousands of Palestinian workers, sealing off Gaza, and halting any Gaza development projects involving Israel are among the proposals. Whether they will be implemented is expected to be decided Sunday at Israel's weekly Cabinet meeting.

Also Friday, the Palestinian Authority agreed to return $50 million in U.S. aid that Washington does not want used by the Hamas-led government, State Department spokesman Sean McCormack said.

The United States, the European Union and Israel consider Hamas a terrorist organization.

The money, doled out last year for infrastructure projects in Gaza, is being returned "in the interest of seeing that these funds do not potentially make their way into the coffers of a future Palestinian government that might not recognize the right of Israel to exist," McCormack said.

Though Hamas operates a successful network of social and charitable organizations for Palestinians, the group has refused to renounce violence and recognize Israel's right to exist.

The United States, the EU and Israel have insisted the group must do these two things before peace talks can resume.

The stage is set for negotiations between Palestinian Authority President Mahmoud Abbas and Hamas, which won 74 of the 132 seats on the Palestinian Legislative Council.

Indications are that the negotiations will be strained. Hamas has said it opposes being bound by the accords signed by the late Palestinian Authority President Yasser Arafat.

In an hour-long speech to the legislators attending the swearing-in ceremonies in the West Bank and Gaza, Abbas praised the democratic process that lifted Hamas to power. But he cautioned the new Palestinian leaders that they must work within the framework of peace agreements and policies with Israel. (Watch the Palestinian parliament being sworn in to office -- 2:18)

"We must put an end to the state of anarchy and chaos," he said.

Abbas, a member of the ousted Fatah Party, is an advocate of the White-House-backed "road map" to Middle East peace.

Calling on Hamas to end "this vicious circle of violence" with Israel, Abbas also had sharp words for Israel, which he chastised for taking unilateral steps in the form of settlements and assassinations.

"If there is anyone who thinks that this kind of measure will force our people to surrender, then they are deluding themselves," he said, warning Israel not to use the Hamas electoral victory "as a pretext to exercise more aggression against our people."

Abbas added that he will continue to work toward security for the Palestinian people and he rejects any attempt by Israel to expel Muslims from Jerusalem. Palestinians have said they envision a Palestinian state with East Jerusalem as its capital.

"Israeli stubbornness regarding Jerusalem will not stop us from realizing our objective, which is the establishment of two states, Palestine and Israel," Abbas said.

Hamas understands Abbas' position regarding Israel, but the group has no intentions of renouncing its anti-Israel positions, spokesman Sami Abu Zuhri said.

"We declared our position from the first, and there is no change," Abu Zuhri said.

Abbas' speech from Ramallah was disseminated via video conference to 48 legislators in Gaza who weren't allowed to travel to Ramallah because of Israeli travel restrictions. Thirty-one of those parliament members were from Hamas.

Though the decision on a prime minister has yet to be made, legislator Abdel Aziz Duaik, a geography professor in the West Bank, was chosen as speaker of the Palestinian parliament.

Hamas' dominance in parliament does not imply autonomy, and Abbas is not without leverage in the upcoming negotiations.

Abbas is expected to pick a Hamas parliament leader as the prime minister, but the Palestinian Authority president has the option to reject that prime minister's government, and he can pick another prime minister if the process to form a government fails.

Once Abbas approves a government, parliament will have to approve it with a vote of trust. (Full story)

Senior Hamas leader, Ismail Haniyeh, a relative moderate, is the frontrunner for the prime minister post.

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