U.S. diplomatic sources said on Friday that the U.S. aid to the Palestinian Authority would be reviewed and possibly reduced if Hamas participates in a government after this month’s Palestinian Parliamentary election.

Yet, the United States wants the Jan. 25 polls to take place as scheduled to strengthen Palestinian democracy and has reluctantly accepted Hamas’s participation in the poll.
This warning came as top officials at the Bush administration stepped up their pressure on the Palestinian President Mahmoud Abbas to disarm the Islamic resistance group which is classified by the United States as a terrorist organization.
But Washington is cautious that in making its first bid for parliamentary elections, Hamas could make a strong showing against the ruling Fateh movement, and win cabinet seats.
According to U.S. diplomatic sources, such an outcome would prompt a review of U.S. financial aid to the Palestinians because of existing U.S. restrictions on providing any "material support" to groups on Washington’s terrorism list.
Speaking on condition of anonymity an American diplomatic source said that" It will have ramifications" for U.S. aid to the Palestinians."
In response, Sami Abu Zuhri., Hamas spokesman said that the U.S. comments amounted to a deliberate and an unaccepted intervention in Palestinian internal affairs, adding that.
"This blackmail is completely rejected by the movement", Abu Zuhri stated, "Our people will defend their choices".
During his visit along with U.S. deputy national security adviser, Elliot Abrams, to Ramallah, the American envoy to the Middle East C. David Welch said Friday, after meeting with  Palestinian President Mahmoud Abbas, that the U.S. firmly believes that the Palestinians everywhere in Palestine are entitled to vote in the Palestinian legislative elections, Israel Radio reported.
"We want to ensure that residents will feel safe and free to vote," Welch added
The radio also reported that chief Palestinian negotiator; Dr. Saeb Erekat said that during the meeting Abbas emphasized the importance of the Palestinian vote particularly in East Jerusalem, which Israel has threatened to ban, adding that Abbas demanded Israel remove checkpoints to allow free movement of candidates, and voters, in the Palestinian territories.
Meanwhile, the Israeli cabinet is expected to vote on Sunday on allowing the vote to take place in East Jerusalem at post offices.