President Bush said today that a landslide win by the radical Islamist group Hamas in Palestinian parliamentary elections was a reminder of the "power of democracy".

But as the implications of the Hamas victory sank in around the world, Mr Bush warned Hamas that it could never be considered a partner in the Middle East peace process until it renounced violence and its commitment to the destruction of Israel.

He also urged Mahmoud Abbas, the Palestinian President, to remain in office despite the humiliation of his Fatah faction.

"If your platform is the destruction of Israel, it means you’re not a partner in peace, and we’re interested in peace," Mr Bush said.

Israeli leaders kept their counsel. The acting Prime Minister, Ehud Olmert, banned officials and ministers from making any public statements until his security Cabinet could meet to discuss the victory of a group that has launched dozens of suicide attacks against its citizens.

But Tony Blair, in Dublin for a peace summit with the Irish Prime Minister Bertie Ahern, said the time had come for Hamas to turn its back on violence.

"Of course, we recognise the mandate for Hamas because the people have spoken in a particular way in the Palestinian Authority," the Prime Minister said. "But I think it is also important for Hamas to understand that there comes a point - and that point is now following that strong showing, where they have to decide between a path of democracy or a path of violence.

"The only way we will ever get to a solution that is good for the Palestinian people is based on democracy and peaceful coexistence between the state of Israel and an independent Palestinian state."

Even before the official results of the election was announced, the European Union said that it was reviewing hundreds of millions of euros in aid that it sends to the Palestinian Authority. "Oh dear, fasten your seatbelts," said a senior EU figure on learning of the resignation of the Palestinian Prime Minister, Ahmed Qureia, and his Cabinet.

Kofi Annan, the UN Secretary-General, said that any group wanting to take part in democratic politics should disarm.

He told Reuters Television at the World Economic Forum in Davos: "Any group that wishes to participate in the democratic process should ultimately disarm because to carry weapons and participate in a democratic process and sit in parliament, there is a fundamental contradiction and I’m sure they (Hamas) are thinking about that too."

Javier Solana, the EU foreign policy chief, said that the result called into question EU aid to the Palestinians, an issue which EU foreign ministers would discuss next Monday.

"The EU will express its views and prospects for co-operation with the future Palestinian government in the light of that discussion and of developments on the ground," Senor Solana said.

Brussels pledged some €280 million in aid alone to the Palestinians in 2005. It has earmarked funds to build a cargo terminal at Gaza airport and sent a monitoring mission to the Gaza Strip border with Egypt.

"It might be a bit difficult to continue to commit European taxpayers’ money to a Palestinian Authority which would not be committed to a peaceful dialogue with Israel," said one diplomat.

Silvio Berlusconi, the Italian Prime Minister, said that Hamas's victory was the worst possible result.

"If this news was confirmed, everything we had hoped for, that chance for peace between Israel and Palestine, is postponed to who knows when," Signor Berlusconi said.

But in the Arab world and around the Middle East the apparent landslide was greeted with jubilation as a triumph which would inspire other Islamist militant groups committed to fighting Israel and America's influence in the region.

In Iran, which is accused by Israel and the United States of supplying Hamas with weapons and funding, state-run radio said that the vote showed that Palestinians support resistance against Israel.

"Now the real representatives of the Palestinian people have come to power," said Javad Majidi, a student at Iran’s Tehran University.

Jihad-Daneshgai, a semi-governmental cultural body active in Iranian universities, congratulated Hamas in a statement, saying the victory "angers the arrogant leaders of the US and the occupiers of Jerusalem".

President Ahmadinejad of Iran met the leaders of Hamas and other militant groups in Damascus last week, although the regime insists it only gives the groups moral support.

"What happened was tantamount to an earthquake," said Muhammad Jalbout, a Palestinian living in Syria.

"This is a victory to all the region’s free people," added Ayyoub Muhanna, a 29-year-old Lebanese who owns a spare parts shop in the southeast town of Rashaya. "The Palestinians gave their vote to the party that gave of its blood."

Some predicted that Hamas’s victory will spur other Islamist groups in the region to seek more political participation. It will give them a major boost," said Dia’a Rashwan, an Egyptian expert on Islamic movements.

Essam el-Aryan, a spokesman for Egypt’s Muslim Brotherhood, which recently increased the number of its seats in Egypt’s parliament from 17 to 88, said the Brotherhood was jubilant.

"This is a great victory for Hamas," he said. But he added that the organisation now faces the challenge "of maintaining good relations with the Arab governments and world powers to secure support for the Palestinian cause".

Times Recommends

• Would you live on the wrong side of the Berlin Wall?
• Wish you were here, says Iraq tourist board
• Russian policeman’s corruption plea to Putin