SALZBURG, Austria (AP) – The European Union threatened to cut off aid to a Hamas-led Palestinian government “unless it seeks peace by peaceful means,” in its strongest signal on the issue to date.

The EU foreign ministers reviewed financial aid to Palestinians, but announced no immediate halt to funds as long as Hamas, a group committed to the destruction of Israel, has not formed a government. It was expected to do so later this month.

“We want to remain a reliable partner for the Palestinian people, but we will not go soft on our principles,” EU External Relations Commissioner Benita Ferrero-Waldner said Friday. «Money will not flow to the new (Palestinian) authority unless it seeks peace by peaceful means.”

Austrian Foreign Minister Ursula Plassnik, who chaired a meeting of EU foreign ministers on Friday, said a Hamas-led government must show it will recognize Israel and work for peace in the Middle East. “Any EU assistance for terrorism is totally excluded. It is up to the new (Palestinian) government to respond to our message,” she added.

German Foreign Minister Frank-Walter Steinmeier said the EU wants to see the Hamas-led government’s program to find out what its stance is on the “road map” to Middle East peace drafted by so-called “Quartet” of the United States, the EU, Russia and the United Nations.

The EU expects a Hamas-led government to recognize Israel, renounce violence and accept all previous agreements between the Palestinians and Israel.

If not, “there can be no cooperation with a government that is led by Hamas,” Steinmeier said. He added the EU has so far not seen any “meaningful signals” from Hamas.

The decision to hold off on cutting aid was seen as a bid to pressure Hamas, which won the Jan. 25 Palestinian elections, to shed its strident anti-Israel views and ensure EU aid continues to ease the economic plight of the Palestinian people.

French Foreign Minister Philippe Douste-Blazy urged Hamas to take action on the demands, but said money must still make its way to the Palestinian people.

“We must avoid an economic suffocation of the Palestinian territories,” Douste-Blazy said. “If we want to avoid social chaos, economic chaos and security chaos, it is in our interest to help the Palestinian population.” Next week, officials from the Quartet nations are to meet in the region to discuss short-term aid for the Palestinians.

Israel has already halted monthly transfers to the Palestinian Authority of some US$50 million (¤42 million) in tax receipts following Hamas’ election victory. The 25 EU foreign ministers grappled with the question of how Europe can remain the largest donor for the Palestinians without any of their aid ending up in the till of a government led by a faction both the United States and the EU consider a terrorist organization.

In a three-page report to the foreign ministers, the European Commission warned channeling aid solely through non-governmental groups offered no guarantee some of the funds wouldn’t end up in the hands of Hamas.

Hamas lawmaker Mahmoud Zahar reacted angrily to the demand his group fall in line with the peace process. “What are the peaceful means?” he asked. “Do they want us to respect Israel’s decision to kill and detain our children?”

He urged the EU to issue a response to Israeli actions against Palestinians. “They shouldn’t just talk about the Palestinians, but also about Israel,” he said.

In 2005, EU governments and the EU executive commission together gave about ¤500 million (US$600 million) to the Palestinian Authority. Officials said half of that came from the European Commission, whose annual aid fluctuates. EU aid for the Palestinian Authority includes funds to pay for salaries and administration costs.

On Feb. 27, the EU granted ¤120 million (US$143 million) in urgent aid for Palestinians before a Hamas-led government takes office for utility bills, U.N. projects and Palestinian Authority salaries. The United States has already ruled out money for the Hamas government and is considering continued financing without money going to Hamas.