Israeli security cabinet said yesterday that it had recommended formally cutting all contacts with the new Palestinian government led by the Islamic Resistance Movement (Hamas).

"Israel will sever all contacts with the Hamas-led Palestinian government, which is a hostile entity," said a statement released by Israeli Acting Prime Minister Ehud Olmert's office after the security cabinet meeting.

The statement also said that the Israeli government would work to "prevent the consolidation of power on the part of the Hamas government", but added that Palestinian President Mahmoud Abbas would not be "disqualified."

Israel would coordinate ways which would bypass the Hamas government to provide humanitarian aid to the Palestinian people, said the statement, adding that it was recommended that the crossings into Gaza be kept open to enable the passage of humanitarian assistance.

In addition, the security cabinet, grouping top Israeli officials, also suggested during the meeting convened by Olmert that Israeli authorities boycott foreign diplomats who meet Hamas officials while on visits to the region.

Israel had boycotted foreign diplomats who met with late Palestinian leader Yasser Arafat in a bid to isolate him.

The security cabinet also proposed to continue the freeze of the monthly transfer of about 50 million U.S. dollars of tax revenues Israel collects on behalf of the Palestinians to the Hamas-led government.

The Jewish state halted the money transfer after Hamas defeated Abbas long dominant Fatah movement in the January Palestinian legislative elections.

The recommendations are expected to be presented to the full cabinet next Sunday for approval.

The statement came after the Hamas cabinet took office on March 29.

Israel has repeatedly said that it will not deal with the Hamas government unless the radical group renounces violence, recognizes Israel's right to exist and accepts previous Palestinian-Israeli deals.

Olmert, whose centrist Kadima party came first in the March 28 general elections, has been tasked with forming a new Israeli government.