Hamas formally took power yesterday, with Palestinian President Mahmoud Abbas swearing in 24 cabinet ministers, including 14 who had served time in Israeli prisons.  Within hours, Canada cut off aid to the cash-strapped Palestinian Authority. Other nations are expected to follow.

With Hamas at the helm, the Palestinian government faces a crippling international economic boycott. It may run into trouble next week when some 140,000 government employees expect their March salaries.

The Palestinian Authority gets much of its annual budget — $2.2 billion Cdn — from overseas. Without money from the Arab world, Europe and the United States, it would be nearly broke.

Yesterday’s swearing-in came just a day after Israel’s election and drew clear lines of confrontation. Hamas says it will not soften its violent platform and Israel’s victorious Kadima party says if that’s the case, Israel will set the borders of a Palestinian state itself, without negotiations, and keep large areas of the West Bank.

Israeli officials said it is unlikely acting Prime Minister Ehud Olmert will negotiate directly with the moderate Abbas as long as Hamas refuses to change. Abbas, leader of the defeated Fatah party, was elected separately and has considerable power.

Israel suspended tens of millions of dollars in monthly tax transfers to the Palestinian Authority after the Hamas victory, and Israeli Foreign Ministry representative Mark Regev said the Israeli cabinet would decide on additional sanctions next week.

The cabinet ministers took their oath in two ceremonies, held simultaneously in the West Bank and Gaza because Israel bans the travel of Hamas leaders between the two territories.

First sworn in was Prime Minister Ismail Haniyeh, who later said at a news conference his government would co-operate with Abbas. He reiterated Hamas won’t negotiate with Israel under the current terms, but if Abbas wants to go ahead with peace talks, "it’s his prerogative and we have no problem with that."

Abbas then held a separate news conference and said the new government "knows what is required" of it, including dealing with Israel.

*this article was reprinted from the London Free Times