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Israeli officials expressed surprise yesterday at reports that Washington would continue providing aid to the Palestinian Authority if Hamas is included in a unity government.

The Los Angeles Times reported that the Obama administration has asked Congress for minor changes in U.S. law that would keep aid flowing to the PA should Hamas-backed officials join a government with rival Fatah.

Under current law, the Palestinian government must meet three criteria: recognizing Israel, renouncing violence and acceding to past Israeli-Palestinian agreements. The Obama administration seeks to provide aid as long as Hamas-backed members in the government meet the criteria, even if the movement they represent does not.

Israeli officials are trying to obtain more details on the matter. Initial communiques sent from Washington to Jerusalem said the change does not represent a new policy toward Hamas, but merely a change in language applied toward a prospective Palestinian unity government.

"Every step that strengthens Hamas only distances peace," a senior Israeli official said. "Should the report turn out to be accurate, it is disappointing and disconcerting." The official added that Prime Minister Benjamin Netanyahu intends to raise the issue with President Barack Obama and members of Congress during his visit to the United States next month.

Meanwhile, Khaled Meshal, the Damascus-based head of the Hamas political bureau, has been reelected to his post for another four years, the Palestinian news agency Ma'an reported yesterday.

The decision was the result of an election held in recent days by senior Hamas leaders. The report also said Osama Hamdan, the Hamas representative in Lebanon, would replace Mohammed Nazzal in the group's 15-person politburo.

In addition, Ismail Haniyeh, the movement's leader in Gaza, appointed Fathi Hamad as its new interior minister in the enclave, replacing Said Siam, killed by the Israel Defense Forces during Operation Cast Lead.

Also yesterday, a senior Foreign Ministry official said Palestinian recognition of Israel as a Jewish state was "essential" for reconciliation between the two sides after Palestinian President Mahmoud Abbas dismissed Israeli calls to do so.

"Recognition of Israel as the sovereign state of the Jewish people is an essential and vital stage in the process of historical reconciliation between Israel and the Palestinians, and the sooner the Palestinians move toward internalizing that fundamental fact, peace between both nations will be advanced," he said.

Abbas had said that "I do not accept it. It is not my job to give a description of the state. Name yourself the Hebrew Socialist Republic - it is none of my business." He added, "We want a state on the 1967 borders, not a centimeter more, not a centimeter less."

A senior official in the Prime Minister's Office said in response, "Without Palestinian recognition of the State of Israel as the nation state of the Jewish people, a diplomatic agreement between Israel and the Palestinians is impossible."

Netanyahu said in a statement last week it would be impossible to make progress on the diplomatic track and reach a peace agreement without Palestinian recognition of Israel as a Jewish state.

But the prime minister said he had not made such recognition a precondition for opening peace negotiations. Netanyahu has shied away from endorsing the creation of a Palestinian state, a main goal of U.S.-backed peace talks that are currently frozen.

Palestinians fear recognition of Israel as a Jewish state could help Israeli leaders resist any return of Palestinian refugees.

Abbas' comments drew mixed responses among Israeli MKs.

"This is more evidence that the Palestinians are not interested in true peace with Israel, said MK Ofir Akunis of Likud.

However, Ahmed Tibi, chairman of the United Arab List-Ta'al, expressed support for the Palestinian president's remarks. "Recognition between countries doesn't include recognition of their characters, but of their right to exist, independence and borders."