Hamas today named its Government, putting loyal party members in charge of all the key Palestinian cabinet offices including the foreign affairs, interior and finance posts.

Ismail Haniya, the Prime Minister-designate, handed in the list of names to the Palestinian President last night.

Hamas has failed to persuade any rival party to join a coalition government, a sign that the Israeli and US strategy of isolating the group, politically and economically, has had some success.

Mahmoud al-Zahar, a leader in Gaza who has survived at least one Israeli assassination attempt, was made Foreign Minister.

Said Siyam, another prominent Hamas leader, was appointed Interior Minister, putting him in charge of several security agencies.

Omar Abdel-Razeq, a prominent West Bank economics professor and Hamas election official, was named finance minister, while Ala el-Deen Al-Araj, an engineer and Hamas member, was put in charge of the economy.

The Cabinet comprises 24 ministers, with some independents and technocrats among the Hamas figures. The list includes only one woman - in charge of women's affairs - and one Christian.

The European Union today gave a guarded reaction to the new Cabinet. Benita Ferrero-Waldner, the EU External Relations Commissioner, said: "They (the proposed Palestinian ministers) seem to be drawn from a narrow Hamas base, but we will have to judge them on what they do and say in the end."

The EU has until now been the Palestinians' biggest donor, giving €500 million (£347 million) each year, but the EU has warned that Western aid will tail off if the Islamic militant movement continues to refuse to recognise the state of Israel, renounce violence and accept interim peace accords.

"We are leaving the door open for positive change but we have to make clear we cannot go soft on our principles," added Ms Ferrero-Waldner.

She was speaking at an event to mark the payment of some €64 million (£44 million) of EU funds to the UN Relief and Works Agency for Palestinian refugees, part of a short-term cash lifeline announced on February 2.

The Quartet of peace mediators - the United States, the EU, Russia and the United Nations - has also stipulated that Hamas must recognise Israel, renounce violence and accept past peace agreements or risk losing aid.

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