American officials expressed concerns over Hamas’ electoral rise in the Palestinian areas saying this poses a dilemma in defining ‘terrorists.’

Hinting that U.S. funding will be affected if Hamas wins PA legislative elections, the officials said they are having problem deciding on millions of dollars pending to go to the Palestinian Authority in aid for projects in Palestinian towns.
‘It’s a very complicated problem. What do you do about these groups when they are both terrorist groups and entering into politics?’ the senior administration official said.
On the other hand, despite that officials still insist the U.S. does not look at Hamas’ political and military activities in two different angles, they way Europe does, the administration may be following Europe’s leads, diplomats say.
Europe is considering removing Hamas from their ‘terror list’ amongst a serious Israeli objection to this.  Israelis argue that removing Hamas from the European Union’s ‘terror list’ would harm the global war on terrorism, undermine Palestinian Authority chairman Mahmoud Abbas, and set the diplomatic process back a number of paces.
The U.S. Administration, the officials said, may be willing to have contact with politicians ‘affiliated with the group’, while arresting that they will not deal directly with the armed wing of Hamas.
There is ‘a big difference’ between people who ‘may be members of organizations but are not terrorists, versus terrorists, people who have blood on their hands,’ White House Scott McClellan said in March.
However, signs of easing its hard-line approach toward Hamas are apparent.  After meeting with Palestinian President Mahmoud Abbas, The U.S. President George W. Bush did not publicly repeat demands the PA dismantle armed groups.  This demand has been always top on the American officials’ agenda in any meeting with Palestinian officials.
Analysts believe that Abbas’ announcement of postponing July 17 legislative elections could buy time for Washington to settle on its Hamas policy. So far, no new date has been set for the vote.