U.S., Israel talk ways to destabilize Hamas - NYT

WASHINGTON, Feb 14 (Reuters) - U.S. and Israeli officials are discussing ways to isolate and destabilize Hamas if it fails to recognize Israel's right to exist, renounce violence and accept previous Palestinian-Israeli agreements, The New York Times reported.

The goal of the campaign would be to ensure that newly elected Hamas officials fail and new elections will be called, the Times said in an article posted on its Web site.

To do that, the allies would seek to starve the Palestinian Authority of money and international connections, making life so difficult for Palestinians that they would vote to return a reformed Fatah movement to office, it said.

The Jerusalem-datelined story cited unidentified Israeli officials and U.S. diplomats.

The officials say Hamas plans to build up its militias and increase violence and, unless it renounces violence and accepts Israel, must be starved of power.

"If they make the wrong choice, all the options lead in a bad direction," a senior Western diplomat told the newspaper.

The strategy carries many risks, the officials conceded, saying Hamas will try to secure support from the larger Islamic world, including allies Syria and Iran.

Hamas may resort to an open military confrontation with Israel, it said, effectively beginning a third intifada, or uprising.

Israel, which does not expect Hamas to meet its conditions, will cut off payments of $50 million to $55 million a month in taxes and customs duties and put that money in escrow.

In addition, some of the aid the Palestinians currently receive from the United States and European Union will be stopped or reduced, the officials told The Times.

Further travel restrictions might also be imposed, including cutting Gaza off completely from the West Bank, the newspaper reported.