From the NYTimes

Either way it goes, things are gonna get ugly pretty quick.

JERUSALEM, Feb. 14 — The United States and Israel are discussing ways to destabilize the Palestinian government so that newly elected Hamas officials will fail and elections will be called again, according to Israeli officials and Western diplomats.

The officials also argue that a close look at the election results shows that Hamas won a smaller mandate than previously understood.

The officials and diplomats, who said this approach was being discussed at the highest levels of the State Department and the Israeli government, spoke on condition of anonymity because they are not authorized to speak publicly on the issue.

Today, an Israeli foreign ministry spokesman, Mark Regev, was quoted by The Associated Press as saying "there was no such plan."

But the officials and diplomats say Hamas will be given a choice: recognize Israel's right to exist, forswear violence and accept previous Palestinian-Israeli agreements — as called for by the United Nations and the West — or face isolation and collapse.

Opinion polls show that Hamas's promise to better the lives of the Palestinian people was the main reason it won. But the United States and Israel say Palestinian life will only get harder if Hamas does not meet those three demands. They say Hamas plans to build up its militias and increase violence and must be starved out of power.

The officials drafting the plan know that Hamas leaders have repeatedly rejected demands to change and do not expect Hamas to meet them. "The point is to put this choice on Hamas's shoulders," a senior Western diplomat said. "If they make the wrong choice, all the options lead in a bad direction."

The strategy has many risks, especially given that Hamas will try to secure needed support from the larger Islamic world, including its allies Syria and Iran, as well as from private donors.

It will blame Israel and the United States for its troubles, appeal to the world not to punish the Palestinian people for their free democratic choice, point to the real hardship that a lack of cash will produce and may very well resort to an open military confrontation with Israel, in a sense beginning a third intifada.

The officials said the destabilization plan centers largely on money. The Palestinian Authority has a monthly cash deficit of some $60 million to $70 million after it receives between $50 million and $55 million a month from Israel in taxes and customs duties collected by Israeli officials at the borders but owed to the Palestinians.

Israel says it will cut off those payments once Hamas takes power, and put the money in escrow. On top of that, some of the aid that the Palestinians currently receive will be stopped or reduced by the United States and European Union governments, which will be constrained by law or politics from providing money to an authority run by Hamas. The group is listed by Washington and the European Union as a terrorist organization.

Israel has other levers on the Palestinian Authority: controlling entrance and exit from the West Bank and the Gaza Strip for people and goods, the number of workers who are allowed into Israel every day, and even the currency used in the Palestinian territories, which is the Israeli shekel.

Israeli military officials have discussed cutting Gaza off completely from the West Bank and making the Israeli-Gaza border an international one. They also say they will not allow Hamas members of the Palestinian parliament, some of whom are wanted by Israeli security forces, to travel freely between Gaza and the West Bank.

On Sunday, Acting Prime Minister Ehud Olmert announced after a cabinet meeting that Israel would consider Hamas to be in power on the day the new parliament is sworn in: this Saturday.

So beginning next month, the Palestinian Authority will face a cash deficit of at least $110 million a month, or more than $1 billion a year, which it needs to pay full salaries to its 140,000 employees, who are the breadwinners for at least one-third of the Palestinian population.

The employment figure includes some 58,000 members of the security forces, most of which are affiliated with the defeated Fatah movement.

Hmmm, Hamas' public stance is the sworn determination to destroy the state of Isreal. Israel isn't giving them the money that might allow them to do so. This strikes anyone as "wrong"?

Plus, starving is the new "hip" in the Middle East. Saddam and pals are even giving it a whirl.

I don't think anyone's saying the policy is wrong. But Hamas/Palestine will obviously turn to radical governments like Syria for help, pulling the increasingly popular "Look at what those secular, pompous western fucks are doing to us" card and trying to shake the hornets nest.

Just saying. We're going from having a few people who quietly resented the west to being a lot more brazen and obnoxious about it.