updated 3/20/2007 8:24:25 PM ET 2007-03-21T00:24:25

A senior U.S. diplomat met Tuesday with the Palestinian finance minister, Palestinian officials said, in the first American contact with the new coalition government and a sign of a break in policy between Israel and its closest ally.

Israel has said it will not have contact with any member of the new Hamas-Fatah coalition. The United States, however, has indicated it would maintain contact with moderates such Palestinian Finance Minister Salam Fayyad.

Fayyad said he met with Jacob Walles, the U.S. consul general in Jerusalem, in the West Bank town of Ramallah.

“This meeting was part of my contacts with the international community,” Fayyad told The Associated Press. Fayyad, a former World Bank official who is well respected in the West, has been leading Palestinian efforts to end international sanctions against their government.

The Palestinian coalition’s political platform announced Saturday stops short of meeting the terms of Western donor countries that Palestinian leaders renounce violence, accept Israel’s right to exist and abide by previous agreements the Palestinians made with Israel and others.

Micaela Schweitzer-Bluhm, spokeswoman for the U.S. consulate, declined to confirm the meeting with Fayyad took place. But Sean McCormack, a State Department spokesman, on Monday specifically named the finance minister as someone U.S. officials have met with and would be willing to meet with in the future.

An Israeli official said the government was waiting for official U.S. comment before responding. The official spoke on condition of anonymity because there was no official U.S. confirmation.

Growing Israeli concerns
Israel has grown increasingly concerned that the tough international stance against Hamas is weakening following formation of the new government.

Several European countries have expressed willingness to meet with Palestinian officials, and Norway, a major donor, already has recognized the new government and said it would resume aid.

On Tuesday, Norway’s visiting deputy foreign minister, Raymond Johansen, said Israeli officials canceled planned meetings with him after he met with Palestinian government leaders from Hamas.

Johansen met Palestinian Prime Minister Ismail Haniyeh of Hamas and other government officials on Monday, becoming the first high-ranking Western official to visit leaders of the violent Islamic movement, which has killed more than 200 Israelis in dozens of suicide bombing attacks.

“We understand that this is a sensitive issue, but we had hoped that it was possible to see them and for them to discuss and also voice their concerns to us,” Johansen told The Associated Press.

Israeli Foreign Ministry spokesman Mark Regev said the Israeli Cabinet decided after Hamas’ January 2006 election victory to bar visitors who meet Hamas members from seeing Israeli officials.

Hamas wounds Israeli civilian
Underscoring Israeli concerns, Hamas militants shot and wounded an Israeli civilian near the main cargo crossing between Israel and the Gaza Strip on Monday while Johansen was visiting Gaza City.

Western donor countries cut off hundreds of millions of dollars in aid to the Palestinian government last year after Hamas’ election victory.

In an effort to break the economic embargo, Hamas on Saturday joined with the more pragmatic Fatah party of Palestinian President Mahmoud Abbas in a coalition.

The government is led by Haniyeh but also includes Fatah ministers who accept the conditions laid down by the Quartet of international peacemakers — the United States, United Nations, Russia and European Union.

The Quartet has demanded Hamas renounce violence, recognize Israel’s right to exist and accept past peace deals.

The coalition stops short of these demands, but includes a call for an expanded cease-fire and vague references that some Palestinians say imply recognition of Israel. Abbas has urged Western leaders to accept the deal, saying it is the best he can get from Hamas.

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