Hamas today hinted that it may suspend its commitment to the destruction of Israel as the militant organisation's leaders convened in Cairo to begin constructing a new Palestinian government.

Senior leaders suggested that past agreements between Israel and the previous Palestinian government would be allowed to stand - at least in the short term.

Hamas' convention calls for Israel to wiped off the map. The party's apparent softening of its uncompromising stance came shortly after Israel agreed to release $54 million in monthly taxes owed to the Palestinian Authority.

Israel collects border duties on behalf of the Palestinians but last week threatened to withold them, deepening the PA's financial crisis and threatening social chaos in the West Bank and Gaza.

Ehud Olmert, Israel's acting Prime Minister, agreed to release the funds but said that future payments hinged on the make-up of the new Palestinian government. Israel, a nuclear power with the biggest army in the Middle East, has repeatedly stated that it will refuse to fund a government committed to its destruction.

As Hamas leaders assembled for talks in Cairo, an aide to Khaled Mashal, the organisation's supreme leader, suggested that it may be prepared to suspend its charter commitment.

Moussa Abu Marzouk, a close confidante of Mr Mashal who is in exile in Syria, said that the future government would abide by past agreements. Egyptian leaders have joined Western powers in pressing Hamas to drop the more extreme elements of its ideology before taking power.

Mr Marzouk told reporters: "There is no authority that inherits another authority without abiding by the agreements already made." But he warned that such a deal with would not necessarily be permanent, adding: "If the agreements contradict logic and rights, there are legal measures to be taken... there are no eternal agreements."

The atmosphere in the Palestinian territories is tense after Israel has launched an artillery assault on the Gaza Strip, the most deadly since the elections. Five Palestinian militants, including Islamic Jihad's master bomb-maker, have been killed in the past 24 hours. The radical faction vowed swift and bloody revenge.

"The Zionist enemy has opened the gates of hell," the armed wing of Jihad, the Al-Quds Brigades said in a statement.

Israel has said it is determined to block a Hamas-led government. During a speech to a business conference in Tel Aviv, Mr Olmert said that he would only be prepared to co-operate with Mahmoud Abbas, the Palestinian President whose Fatah Party was crushed in the ballot, on condition that Hamas does not lead the new government.

"We have no interest in hurting the head of the Palestinian Authority, Abu Masen," Mr Olmert said , referring to Mr Abbas. "As long as he does not co-operate with Hamas, and the Palestinian government is not a Hamas government, we will cooperate with the Palestinian Authority cautiously and responsibly."

With Hamas holding 75 of the PA's 135 seats, it is unclear how this could be achieved. European and US leaders are attempting to woo Hamas into the diplomatic fold by threatening to withdraw the annual $900-million aid packages unless it renounces violence.

Mr Mashal was expected to leave Syria for Cairo this week to guide the process of assembling a Palestinian coalition. Hamas has repeatedly stated that it wants to work with the secular Fatah organisation that it trounced in the elections, but Fatah has so far refused to engage.

The new Palestinian parliament will meet for the first time on February 16. Mr Abbas then has two weeks to appoint a party, presumably Hamas, to form a government. The party has five weeks to complete the task, meaning it is likely that a Hamas government may not be formed until after Israel’s March 28 election.

Hamas has a financial interest in delaying the formation of its government for as long as possible, to ensure Israeli and Western aid is not cut off before it has agreed other sources of funding. Senior Hamas leaders have embarked on a tour of Arab and Muslim nations to try to enlist their financial support.

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