Israel will not cut off water, gas or electricity to the Palestinian Authority even after Hamas forms a government - something expected as early as Monday - because it does not want to create a severe humanitarian crisis, diplomatic sources confirmed to The Jerusalem Post Thursday. They said no Israeli interest would be served by cutting off water to the PA, or if life-support machines in Gaza Strip hospitals failed to function because of an electrical blackout. "This is not a situation that we want to get into," one said. Defense officials said that Israel would also continue to allow the flow of medicine, agricultural goods and other supplies into Gaza and the West Bank. Likewise, they said, Palestinians would "in extreme cases" be allowed to travel to hospitals in Israel for treatment. There is a correlation, the diplomatic sources said, between the international community's resolve to insist Hamas recognize Israel, disavow violence and accept previous agreements and the depth of the humanitarian crisis. The more the Palestinians suffer as a result of a cutback in international aid resulting from the Hamas victory, the more the international community will look to Israel to provide solutions, and the more the West will be willing to "lower the bar" regarding what Hamas needs to do to gain international legitimacy. Defense officials said that the formation of a Hamas government would not impact on the IDF's policy of operating in the West Bank, At the same time they said Hamas leaders were not currently in Israel's sights after the group ceased its involvement in terrorism. "We won't go after Hamas," one official said. "But we fight against terrorists all the time and anyone who is involved in terror is our target." If Hamas resumed its terror activity, he said, its leaders - including prime minister-designate Ismail Haniyeh - would become targets for arrest or even targeted killing. The defense establishment, officials said, had drawn up a list of sanctions and steps it planned to implement the moment Hamas officially took over the PA. Diplomatic sources said that Israel would have to decide "in the next few weeks" how to relate to previous agreements signed with the PA, and that the country's relationship to these agreements would not necessarily change overnight once the Hamas government formally took office. "The road map calls on the PA to fight terrorism," one source said. "It's not clear this is something we want to say is now abrogated." At the same time, he said, "we will not recognize the PA, speak to it, or transfer funds." One defense official said that while Israel would not talk to nor coordinate with a Hamas-run PA, "we will, however, use alternatives and deal directly with the people or with the local relief organizations." Maj.-Gen. Yosef Mishlav, coordinator of government activities in the territories, has mapped out all of the "points of contact" between Israel and the Palestinians and has come up with alternatives that would allow a continuation of coordination, but without the PA. Diplomatic sources said that the European position on how to deal with the new reality in the PA was not monolithic. One said there was a tendency in Europe to want to see "dialogue, a process, something that moves things forward," and a real concern about humanitarian problems. "I hope they understand that the tougher they are now, the more likely something good could develop in the future, but that if they are soft now, the diplomatic process is bound to stagnate," another source said. These comments came the same day the World Bank issued a warning of dire poverty inside the PA if Israel and the international community cut off aid and revenue transfers to a Hamas government. "Suspending revenue transfers, constraining Palestinian movement and access and reducing aid flows would cause severe economic damage if the available tools were employed with sufficient vigor," the report said. Under this scenario, it stated, unemployment would hit 47 percent and poverty 74% of the PA population by 2008. In a related development, Foreign Minister Tzipi Livni told a press conference that the time has come to stop blaming Israel for PA Chairman Mahmoud Abbas's weakness. Her remarks came amid criticism that the IDF's raid on the Jericho prison had further weakened Abbas. "We need to say for once that the person responsible for Abu Mazen's [Abbas] standing is first and foremost Abu Mazen. Abu Mazen's position is dependent on his actions, or his failures, and in this case we are talking about his failure," she said. Livni said that every time Abbas "doesn't provide the goods," there is an attempt to blame Israel for his problems. In this case, she said, Abbas failed to live up to agreements with the US and Britain regarding the monitors at the prison. "It is clear in this situation that Israel, as opposed to 1948, did not ask the British to leave. They decided to leave because they didn't have a choice and felt threatened," she said. "Israel did what every other normal country in the world would do when the murderers of one of its ministers were about to be set free."