Israel wary on Palestinian deal

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Israel has cautiously welcomed plans for a Palestinian unity government, but has warned that any new leadership must meet conditions set by the West.

Israeli Foreign Minister Tzipi Livni said a new government must recognise Israel and abandon violence.

Palestinian leader Mahmoud Abbas struck a deal with Hamas on the formation of a new government on Monday.

International aid donors imposed an embargo on the Palestinian Authority after Hamas took power in March.

Complex talks

"The main question is, are we seeing a real change here or an attempt to buy an entry ticket to the United Nations at a cheap price?" Mrs Livni said.

The exact details of the programme of a national unity government agreed between Mr Abbas and Hamas are not yet known.

Mr Abbas is expected to dissolve the Hamas led-government within the next 48 hours, his spokesman said on Monday.

All the signs are that Ismail Haniya, the current prime minister from Hamas, will be asked by Mr Abbas to form the next Palestinian government.

Talks between the two men on a unity government have been going on for months.

During a visit to the West Bank on Sunday, UK Prime Minister Tony Blair said a unity government that recognised Israel would allow donors to end the crippling aid boycott.

Hamas wants a unity government, but has rejected the UK proposal.

A spokesman for the group reiterated its position on recognising Israel on Monday.

"Hamas will continue to have its political agenda... we will never recognise the legitimacy of the occupation," Sami Abu Zuhri said.

Details unknown

Whether the international community lifts the aid embargo on the Palestinian Authority is likely to depend on the details of the Hamas-Fatah deal.

The international aid embargo has crippled the authority, which has been unable to pay its tens of thousands of employees.

In the Gaza Strip, living conditions for Palestinians have reached breaking point, the UN warned recently.

Israel has kept Gaza's borders largely sealed for months and conducts regular military operations, prompted in part by the capture of an Israeli soldier.

Mr Blair's meetings with Mr Abbas and with Israeli Prime Minister Ehud Olmert appear to have brought the prospect of talks between the two men closer - both said they were ready for talks without pre-conditions.