U.S.: No Business With Hamas

The U.S. government has barred Americans from doing most business with the new Hamas-led Palestinian government, officials said Friday, stepping up U.S. financial pressure on the Islamic militant group.

In a memo obtained by The Associated Press, the U.S. Treasury Department said "transactions with the Palestinian Authority by U.S. persons are prohibited, unless licensed." It said the decision was based on "existing terrorism sanctions."

Palestinian officials condemned the American decision.

The United States and European Union have branded Hamas, which has killed hundreds of Israelis in suicide attacks, a terrorist group.

The United States and the EU have cut off hundreds of millions of dollars in aid to the Palestinian Authority following Hamas' victory in Palestinian legislative elections, demanding the group renounce violence and recognize Israel.

Hamas has rejected the calls, despite a growing financial crisis that has left the government broke.

The U.S. decision affects most dealings with the Palestinian government, but does not apply to private business interests, the memo said.

"This restriction is limited to transactions with the PA government and does not apply to transactions with individuals or other entities in the Palestinian territories," it said.

The U.S. decision gives Americans doing business with the Palestinian government 30 days to end their dealings, according to the Treasury Department.

It said business with the Palestinian government will be permitted to continue in six areas, primarily humanitarian aid and work for international organizations like the United Nations.

"In the interest of supporting the humanitarian needs of the Palestinian people, Treasury will allow certain limited transactions by U.S. persons and organizations with the Palestinian Authority," it said.

It also said business can continue with government departments controlled by Palestinian President Mahmoud Abbas, a moderate who favors peace talks with Israel. However, the new Hamas government controls all major ministries after being sworn into office two weeks ago.

Alaa Araj, the Palestinian economy minister, said the decision was part of the American "mobilization of all its allies and individuals in the region to boycott this government."

He said it appears "the U.S. administration and its allies have nothing better to do than to put obstacles in our way."

But he said the step would not be economically significant, saying the state of the business sector in the West Bank and Gaza is poor.