HAMAS, the militant Palestinian group, has named a government dominated by its own leadership, defying international pressure and confounding hopes that it would moderate its extremist stance.

After other Palestinian factions refused to join a coalition, the victorious Islamist group nominated a Cabinet whose senior members have all been jailed, deported and escaped Israeli assassination. Chief among Prime Minister-designate Ismail Haniya’s 24 ministers are Dr Mahmoud al-Zahar, a hardliner, as Foreign Minister, and Said Siyam as Interior Minister. Most others are Hamas, with some pro-Islamist independents and technocrats, one woman and one Christian.

President Mahmoud Abbas is expected to approve them but may try to delay the decision until after the Israeli general election on March 28. However, Shaul Mofaz, Israel’s Defence Minister, said that if President Abbas accepted the line-up he would “officially turn the Palestinian Authority into a terror entity”. Hamas faces a cash crisis, as EU foreign ministers met in Brussels yesterday to consider how to continue providing aid to Palestinians without endorsing what is regarded as a terrorist organisation by the EU and US.

Benita Ferrero-Waldner, the EU External Relations Commissioner, gave warning that although Europe agreed to provide an emergency tranche of $78 million (£44 million), it would not “go soft on our principles”, and held out the threat of cutting off funds unless Hamas met certain demands.

Jack Straw, the Foreign Secretary, said: “We don’t want to punish the Palestinian people for their votes at all. On the other hand the Palestinian people need to say to any Hamas government that democracy involves responsibilities and, above all, a responsibility not to get involved in violence.”

Omar Abdel-Razeq, Hamas’s US-educated candidate for Finance Minister, said that if Western donors cut off funds, Hamas could bridge the gap by better stewardship of the Palestinian budget and seeking alternative funding. However, humanitarian agencies and James Wolfensohn, the international envoy to the Middle East, have said that instability would ensue if the West cut off aid.

Mr Wolfensohn said that since Israel refused to hand over $50 million in monthly VAT and customs revenues, the Palestinian Authority relied on international aid to fill a $120 million monthly gap between revenue and expenditure. David Shearer, head of the UN Office for Co-ordination of Humanitarian Affairs in Jerusalem, said that three things were likely to happen if the authority was starved of funds. Essential services would degrade and authority employees would lose their salaries, with a “dramatic rise in the poverty rate”. The third would be to place thousands of armed authority security forces on to the streets without jobs.

THE HARD MEN

Prime Minister: Ismail Haniya, 43. Imprisoned by Israelis twice

Foreign Minister: Mahmoud al-Zahar, 55. Imprisoned once by Israelis. Survived Israeli assassination attempt but lost a son. Hardliner. Hostile to Israel and the US

Finance Minister: Omar Abdel-Razeq, 48. Arrested twice by Israel

Interior Minister: Said Siyam, 46. Teacher. Lost job with UN relief agency over political affiliations. Member of the Hamas’s political office in Gaza In charge of foreign relations for Hamas. Jailed four times by Israelis

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