MILITANT Islam scored one of its biggest victories last night when election results showed that Hamas had crushed the Fatah party that had ruled Palestinian politics for 40 years.

The victory of a group dedicated to Israel’s destruction shocked Western leaders and put paid to any hopes of swiftly reviving the Middle East peace process.

President Bush, Tony Blair and other world leaders united in demanding that Hamas, responsible for more than 50 suicide bombings and 430 Israeli deaths in recent years, renounce violence and recognise Israel or face isolation.

The Israeli inner Cabinet was huddled last night in an emergency meeting to consider its response to the rise to power of its most implacable foe barely 30 miles from Tel Aviv.

Hamas, officially listed as a terrorist organisation by the United States and the European Union, confounded expectations by routing its opposition, gaining 76 seats in the 132-seat parliament. Fatah, founded by the late Yassir Arafat and committed to the peace process, secured just 43 seats.

Ahmed Qureia, the Palestinian Prime Minister, and his Cabinet resigned even before the results were announced.

World leaders urged the reformist Fatah President, Mahmoud Abbas, not to follow his colleagues into the political void. In a televised speech last night, Mr Abbas pledged that he would continue peace negotiations with Israel. “I am committed to implementing the program on which you elected me a year ago,” he said.

Mr Bush acknowledged that Palestin-ians had exercised their democratic right, but insisted that the US would not deal with leaders who denied Israel’s right to exist. “If your platform is the destruction of Israel, it means you’re not a partner in peace,” he declared.

Mr Blair insisted: “There comes a point, and that point is now . . . where they have to decide between a path of democracy or a path of violence.”

The EU said there was “no place in a political process for groups or individuals who advocate violence. The EU urges all factions to disarm, renounce violence and recognise Israel’s right to exist.”

Ehud Olmert, the acting Prime Minister, said last night that Israel would not negotiate with a Palestinian government that includes Hamas members. “The state of Israel will not negotiate with a Palestinian administration if even part of it is an armed terrorist organisation calling for the destruction of the state of Israel,” he said.

But as Hamas prepared to form the next government, its leaders repeatedly defied demands from Israel, the US and the EU that it lay down its weapons. Hailing a new era, Ismail Haniya, the top candidate on the Hamas list and a contender to become Prime Minister, challenged the international community to recognise its democratic mandate and insisted that it would continue on the twin paths of arms and politics. “As long as there is occupation, resistance will continue,” he said. “We have every right to protect ourselves and defend ourselves with all means possible.” Mr Haniya said he saw little point in negotiations with Israel.

Mahmoud al-Zahar, the most prominent Hamas figure in Gaza, said its leaders would meet Mr Abbas and offer to work with him and all other parties. But he too reiterated the group’s long-standing refusal to recognize Israel and scorned Mr Bush’s “road map”, which Israel has said could prove the basis of future withdrawals from the West Bank.

Fatah insisted that it would not enter any political partnership with Hamas, which moderated its rhetoric before the election but whose manifesto still calls for the destruction of the state of Israel. “We will be a loyal opposition and rebuild the party,” said Saeb Erekat, the chief Palestinian negotiator.

Many Palestinians are now alarmed by the implications of Hamas’s victory for relations with Israel, which controls virtually all border crossings and for donor countries that supply the aid upon which they rely.

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