Haniyeh: Hamas Won't Recognize Israel

Palestinian Authority Prime Minister Ismail Haniyeh, of the Islamic group Hamas, gestures during his speech at a Hamas rally during which he briefly fainted at a soccer stadium in Gaza City, Friday, Oct. 6, 2006. Haniyeh, 46, is fasting, like all observant Muslims during the holy month of Ramadan. The speech was delivered on a hot autumn day. (AP Photo/Hatem Moussa) (Hatem Moussa - AP)

"In the end, (Palestinian) people will be disappointed" with Hamas' inability to govern and turn it out of office. "Hamas let people down" by its inability to pay its workers, Peres told Israel's Channel 10 TV.

The deteriorating financial situation and the political infighting spilled over into violence last week, killing 11 people in Gaza. Addressing 300 religious and political leaders in Gaza at a "unity and reconciliation" feast on Sunday, Haniyeh appealed for calm.

"We may criticize each other, raise our voices," he said. "However, it is certainly our concern and religious and moral commitment that matters don't come down to conflict, infighting and civil war."

The West imposed its aid cutoff in March, when Hamas formed a government after sweeping Fatah out of office in a parliamentary election. Since then, the government _ the main Palestinian employer _ has paid out little money to its 165,000 workers.

Angry workers threatened Sunday to widen their protests, paralyzing the West Bank and Gaza Strip by bringing employees of the petroleum authority into their strike and drying up local fuel supplies if the government does not pay them.

"In our hands are cards that have not been used yet," said Ahmad Assaf, a spokesman for the Union of Civil Servants.

In violence Sunday, two Palestinians were killed in the West Bank. Palestinian gunmen ambushed Israeli forces in a refugee camp next to Nablus, and a militant was killed, Palestinian security and the military said.

In the afternoon, a Palestinian man was shot and killed on his way to break the Ramadan fast with family, relatives said. Israeli media said he was circumventing an Israeli checkpoint. The army said it was unaware of any shooting incident in the area and its forces had not opened fire.