Israel refuses to allocate cellular frequencies to the new Palestinian cellular services company recently set up in the territories.
The company, Al-Wataniya, is expected to provide 500 new jobs and will compete with the existing Jawal Cellular Telephone Company.
Al-Wataniya received its operating license in March, but the Israeli Communications Ministry has yet to respond to the Palestinian Communications Ministry's request for new frequencies for the company.
Without such an allocation the new Palestinian cellular firm cannot operate.
"Israel is not refusing to allocate frequencies, and when it is decided that we will talk with the Hamas government the matter will be arranged," said an official at the Israeli ministry.
Israeli officials said that they do not respond to requests from Hamas officials.
The Palestinian officials say that their requests that they presented before the establishment of the Hamas government have also not been answered yet.
Israel provided the initial frequencies for Jawal in 1999.
Due to the high population density in the territories and the large number of "borders" between the PA and the various areas under Israeli control, there is a need for strict coordination of technical issues between the two sides.
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