Israel's chief won't compromise until Hamas renounces violence

Israel refuses to hand over tax rebates that could be used for terrorism.
JERUSALEM (AP) -- Israel's acting prime minister on Sunday ruled out contacts with a Palestinian government led by Hamas unless the Islamic group renounces violence, and the defense minister threatened to "liquidate" militants if they attack Israelis.
Acting Prime Minister Ehud Olmert said Israel will stop the monthly transfer of tens of millions of dollars in tax rebates and other funds to the Palestinian Authority if a Hamas government is installed.
With the latest comments, Israel showed no signs of backing down from the hard line it has taken since Hamas won a surprising landslide victory in Palestinian legislative elections last week.
Hamas, which opposes the existence of Israel and has killed hundreds of Israelis in suicide bomb attacks, is expected to lead the next Palestinian government, hurting the chances for a peace deal.
Also Sunday, about 7,000 Israeli security forces, anticipating violent resistance, were training to dismantle two small West Bank settlement outposts later this week, police said. Resistance is expected to be fierce in Amona and among Israeli squatters who took over an abandoned market in the Palestinian city of Hebron.
Israel's Supreme Court rejected a request from Jewish settlers to delay the order, clearing the way for the operation to proceed. It will mark Israel's first evacuation of Jewish settlers since withdrawing from the Gaza Strip and part of the West Bank in August.
Global support
Olmert, addressing the weekly meeting of his Cabinet, said he has been in touch with leaders around the world in recent days and received support for the tough Israeli stance against Hamas.
"We clarified that without a clear abandonment of the path of terror, a recognition of Israel's right to exist in security and peace ... Israel won't have any contact with the Palestinians," Olmert said. "These principles are accepted by the international community. On this issue, I don't intend to make any compromises."
Hamas refuses to recognize Israel or disarm, though it has hinted that it could reach a long-term truce or other accommodation with the Jewish state.
Visiting German Chancellor Angela Merkel told a news conference Germany will only deal with Hamas if it recognizes Israel and renounces violence. Merkel was meeting Israeli and Palestinian officials but said she would not meet Hamas representatives.
Israeli officials said the ban on contacts did not extend to Palestinian leader Mahmoud Abbas, who accepts the Israeli conditions and is eager to resume peace talks. Abbas was elected to a four-year term last year and remains in power.
However, Olmert said Israel will not hand over value added tax and customs funds it collects on behalf of the Palestinians to a Hamas-led government.
Israel has "no intention" of sending funds to terror groups, Olmert told a joint news conference with Merkel.
Every month, Israel transfers an average of $54 million collected at ports and border crossings. In the past, Israel has held up the transfers during times of tension. Such a delay now would cripple the cash-strapped Palestinian government.
During the Cabinet meeting, Defense Minister Shaul Mofaz said Hamas "is portraying policies of responsibility" and even has tried to restrain suicide attacks by the radical Islamic Jihad group.
But earlier, Mofaz said Israel is prepared to kill Hamas militants if the group resumes its attacks.
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