JERUSALEM (Reuters) -The United Nations advised its aid agencies on Tuesday to avoid having contacts with Hamas political leaders, but balked at U.S. calls to isolate the cash-strapped Palestinian government.

U.N. officials said the agencies would maintain contacts with rank-and-file officials in the new Hamas-led authority, while avoiding senior leaders in the Islamic militant movement, which won elections in January and took power two weeks ago.

The restrictions are likely to increase the sense of isolation felt by the Hamas leadership after the United States and the European Union cut off funding and contacts in the past week and the severing of links by Israel.

A senior U.N. official said U.N. aid agencies would “avoid political contact” with cabinet ministers and other high-level appointments in the new government.

But by maintaining contacts at a “technical level for operational purposes,” the United Nations bucked efforts by the United States to entirely shun the government and ministries which provide essential services.

“Contacts will continue at levels to ensure the continuation of humanitarian programs,” a U.N. official told Reuters.

U.N. officials say they are concerned that a cut-off in direct assistance to a Hamas-led Palestinian Authority could trigger a humanitarian crisis and hobble the very institutions that would be needed to run any future Palestinian state.

The United Nations is a member of the Quartet of Middle East mediators with the United States, the European Union and Russia.

Russia has brushed aside pressure from the United States and Israel to shun Hamas and on Tuesday called the decision to cut off funding to the Palestinian government a mistake.

The U.N. move followed an offer by Palestinian President Mahmoud Abbas to resume peace talks with Israel as soon as it formed a new government, even though the Israelis are shunning the Palestinian Authority led by his Hamas rivals.

“We are ready to begin negotiations on the basis of the road map from the minute the Israeli government is formed,” Abbas told reporters in Ramallah, referring to the U.S.-backed peace plan that was drawn up in 2002 but never implemented.

“There is no other way but direct negotiations based on international legitimacy,” he said.

Israel has said it will not deal with Hamas, which is sworn to the Jewish state’s destruction, but has left the door open to negotiations with Abbas, whose once-dominant Fatah movement was defeated by Hamas in the polls.

Israel’s acting Prime Minister Ehud Olmert, whose Kadima party emerged on top in March elections and is trying to form a coalition government, on Tuesday reiterated his description of the Hamas-led Palestinian Authority as a “terrorist entity.”

Since Hamas took power in the West Bank and Gaza Strip on March 29, Israel has applied intense financial, diplomatic and military pressure on the new government.

The United States and the European Union have cut direct aid to the administration, which is laden with around $1.3 billion of debt and unable to pay salaries due to 140,000 staff.

In the past week, Israel has bombarded targets in Gaza, from where militants often fire home-made rockets into Israel.

At least 15 Palestinians, mostly fighters, have been killed — the highest Gaza death toll since Israel pulled out in August and September last year after 38 years of occupation.

Abbas said he was in touch with U.S., European and Israeli officials to try to end the Israeli attacks, which he described as an “unjustified, unmatched escalation.”

“If there are rockets fired… we condemn this, but that doesn’t justify the demolitions, the killings,” he said.

To try to ease its growing financial crisis, Hamas has sought support from Arab allies, so far without success. On Tuesday, it sent a delegation to Iran on a similar mission.

A Hamas official said Arab states would face unrest at home if they failed to act soon to support the Palestinian Authority.

In Ramallah, a crowd of around 500 people demonstrated against the combined U.S., EU and Israeli pressure, while politicians called for the public to donate money.

Speaking to his cabinet via video-link from his base in Gaza, Palestinian Prime Minister Ismael Haniyeh condemned the EU, the United States, and Israel for its military attacks.

“The military escalation coincides with a political and a financial siege against the Palestinian people and government,” he said. “It is clear that the aim of the escalation is to bring the Palestinian people and their government to their knees.”