ISRAEL is poised to impose punitive restrictions on the Palestinians after Hamas, the Islamic militant group, takes control of the new parliament today.

Israel’s inner Cabinet, led by Ehud Olmert, the acting Prime Minister, will decide tomorrow on a range of security and economic measures designed to increase the pressure on the Hamas-led administration.

Israeli officials said that the Government would wait to judge the tone of the inaugural speech by Mahmoud Abbas, the Palestinian President, when he opens parliament in Ramallah, and Hamas’s reaction to it. The Israeli Government, facing its own election next month, has been talking tough since the stunning Hamas election victory three weeks ago.

It will refuse to have any dealings with the Hamas-controlled Government unless it rejects violence, recognises Israel’s right to exist and agrees to abide by the Palestinian Authority’s past commitments.

The Israeli Government will consider freezing monthly transfers of $60 million (£35 million) from taxes and Customs duties at tomorrow’s Cabinet meeting.

Palestinian workers from Gaza may also be barred from their jobs in Israel, exports from the Palestinian coastal strip halted and goods imported there restricted to basic needs such as fuel and water.

Mark Regev, the Foreign Ministry spokesman, said that the aim of any measures was to make Hamas — responsible for more than 50 suicide bombings — alter its stance.

He added that Israel was unwilling to transfer funds to the Palestinian Authority, which would become a “terrorist regime” as soon as Hamas takes control of parliament.

“As of [tomorrow] the Palestinian Finance Minister will be responsible to the Hamas-led parliament,” Mr Regev said. “Is anyone prepared to give us a guarantee that such money won’t be used in suicide bombings?” Hamas won 74 seats in the Palestinian parliament, compared with 45 for Mr Abbas’s secular Fatah movement.

At the opening parliamentary session, Mr Abbas will urge Hamas to form a Cabinet that recognises interim peace agreements with Israel, and his efforts to reach a permanent settlement, said Nabil Abu Rudeineh, a senior aide.

“Any new government should be a continuation of the previous government. They have to say this publicly and in writing,” he added. Hamas leaders suggested that they would try to reach a compromise with the Palestinian President but struck a defiant note in the face of Israeli threats to cut off funding. Ismail Haniya, 43, the Hamas leader tipped to become Prime Minister, said that Palestinians would weather any of the Israeli measures.

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