GAZA CITY, March 30, 2006 (IslamOnline.net & News Agencies) – Hours after the new Hamas-led Palestinian government was sworn in, Canada decided to suspend aid and contacts with the Palestinian Authority and Washington ordered diplomats to cut off contacts with the cabinet.

"Canada will have no contact with the members of the Hamas cabinet and is suspending assistance to the Palestinian Authority," Foreign Minister Peter MacKay said in a statement on Wednesday, March 29, Reuters reported.

The Canadian government, becoming the first donor to suspend aid to the PA, said the decision came after Hamas failed to renounce violence and recognize Israel.

"A clear commitment by the Hamas government to the principles that we and the international community have outlined remains an essential precondition for Canada to resume any assistance to the Palestinian Authority."

Canada gives C$25 million ($21 million) a year to the PA to fund aid projects.

The announcement came just hours after the 24-member Hamas-led cabinet was sworn in by Palestinian President Mahmoud Abbas and one day after acting Israeli Prime Minister Ehud Olmert's Kadima party won the Israeli election.

Olmert intends to unilaterally set Israel's borders without consultations with the Palestinians.

The Palestinian government said it would have been better if Ottawa discuss the government program before taking the decision.

"We regret this decision. We consider that it has been taken in haste and contrary to the democratic norms and the principles of human rights which are the basis for relations between states," Information Minister Yussef Rizqa told Agence France-Presse (AFP).

"The Canadian government would have been better off meeting with the government that Hamas has formed to discuss and study its program and listen to its point of view."

Mushir Al-Masri, a Hamas legislator, said the freeze showed that Canada was biased toward Israel.

"This hasty decision represents a collective punishment on the Palestinian people who practiced their democratic choice (in electing Hamas)," he told Reuters.

The decision to cut off aid to the Palestinians also drew fire inside Canada.

"We're disappointed and perplexed that Canada would be the first to decide to make this move," Hussein Amery, president of the National Council on Canada-Arab Relations, told Reuters.

Similarly, the Bush administration has ordered its diplomats and contractors not to have any contacts with Palestinian ministries.

President George W. Bush said Wednesday it made "no sense" to support the new Hamas-led administration unless the group renounced violence.

He also defended his threat to cut funding to the Palestinian government if Hamas refuses to recognize Israel, even though the group was democratically elected in January.

"I think that aid should go to suffering Palestinians, but nor should it go to a government, however, which has expressed its desire to destroy its neighbor," Bush told an audience at the Freedom House, an independent pro-democracy group.

"We support the election process, we support democracy, but that doesn't mean we have to support governments that get elected as a result of democracy."

The US and the EU have threatened to cut off aid to the Palestinian Authority once a Hamas-led government is in place.

The US, which has given more than $1.5 billion in aid to the Palestinians since 1993 and had budgeted $234 million for 2006, has begun a full review of such assistance program since Hamas's election win.

Israel has frozen the monthly transfers of tax revenues it collects on behalf of the PA, worth around $50 million.

Hamas has played down the aid threat, expecting generous aid from Arabs and Muslims to bridge the financial gap.

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