GAZA CITY, Gaza Strip (AP) – President Mahmoud Abbas’ bumpy efforts to set up a Palestinian government acceptable to the West suffered a new setback Friday when the prime minister from the Islamic militant Hamas group said he would not lead a coalition that recognizes Israel.

Hamas has ruled alone since March, but this month agreed to share power with Abbas’ moderate Fatah Party in hopes of ending a crippling international aid boycott of the Palestinian Authority.

The Hamas-Fatah coalition deal sidestepped recognition of Israel. Instead, it said the government would seek to establish a Palestinian state alongside Israel, which implies recognition. However, the U.S. and Israel demanded a clear commitment from Hamas on the subject, and Abbas was forced to revisit the issue.

At the United Nations on Thursday, Abbas indicated a national unity government would recognize the Jewish state. It wasn’t clear whether Abbas promised more than he can deliver, in hopes of soliciting international support, or whether he was trying to pressure Hamas.

Abbas and his aides were en route Friday from New York to Cairo and could not be reached for comment.

Hamas leaders reacted swiftly.

Prime Minister Ismail Haniyeh of Hamas told Muslim worshippers in Gaza that recognition of Israel is out of the question. “I personally will not head any government that recognizes Israel,” said Haniyeh, considered a leader of Hamas’ more pragmatic wing.

He reiterated that Hamas is ready to establish a Palestinian state in the West Bank, Gaza and east Jerusalem, areas Israel captured in the 1967 Mideast War, and to honor a long-term truce with Israel.

“We support establishing a Palestinian state in the land of 1967 at this stage, but in return for a cease-fire, not recognition,” Haniyeh said.

Hamas officials left open the possibility of more negotiations, saying they want to hear from Abbas when he returns to the region. “We don’t want to build on statements or positions we heard in the media,” said Hamas spokesman Sami Abu Zuhri. “When Abu Mazen (Abbas) comes back, we will listen to him and evaluate.”

Palestinians appeared to be conflicted over what they want their leaders to do.

Recent opinion polls suggest an overwhelming majority wants Hamas to stick to its refusal to recognize Israel, apparently as an expression of Palestinian pride, even at the price of economic hardship caused by the foreign aid boycott. Hamas would lose much of its popularity if it were to issue a statement of recognition, the polls indicate. However, two-thirds of Palestinians also want Abbas to negotiate a peace deal with Israel.

Caught between such contradictory expectations, Abbas has been banking on a vague agreement.

An Abbas aide, Nabil Amr, said Friday that Hamas would not be expected to issue a statement of recognition, but would be asked to recognize agreements signed by the Palestine Liberation Organization, including the PLO’s 1993 mutual recognition agreement with Israel. Abbas heads the PLO.

However, the U.S. and Israel might not settle for such fuzzy language.

Israeli government spokeswoman Miri Eisin reiterated that any Palestinian government must yield to the demands of the international community – recognition of Israel, renunciation of violence and acceptance of previous peace agreements.

On the other hand, a collapse of the coalition deal could push the Palestinians deeper into crisis. Hamas-Fatah tensions in Gaza, already high after months of skirmishes between rival gunmen and last week’s assassination of an Fatah-allied security chief, could boil over.

On Friday, thousands of Fatah supporters staged an anti-Hamas rally in a refugee camp near Gaza City. Hundreds of gunmen firing in the air led the marchers who chanted slogans against Haniyeh and Foreign Minister Mahmoud Zahar of Hamas.

Abbas has few political options. He could fire the Hamas government and replace it with an emergency government, but the new lineup would have to win approval from the Hamas-controlled parliament, which seems unlikely.

On the Gaza-Egypt border Friday, gunmen set off a small bomb near Palestinian police guarding European Union monitors, injuring two Palestinians. The explosion came just after the vital crossing opened for the first time in a month.

The gunmen escaped after a 15-minute firefight. Despite the violence, the crossing remained opened throughout the day Friday.

The crossing is Gaza’s main gateway to the world, and is controlled by the Palestinian Authority and Egypt, with help from EU monitors. It has been shut almost continuously since Hamas-linked militants captured an Israeli soldier June 25.

Also Friday, Israel sealed the West Bank and Gaza Strip for the two-day Jewish New Year’s holiday. Despite the travel ban, several thousand medical workers, clergy, farm laborers and teachers will be able to enter Israel, the army said.

AP-ES-09-22-06 1422EDT

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