Hamas leader Ismail Haniyeh on Sunday played down Israel's decision to halt the transfer of monthly tax revenues to the Palestinian Authority, saying such measures won't scare the Palestinians. Meanwhile, PA Chairman Mahmoud Abbas said the PA was facing a "real financial crisis," adding that he was working toward ending Israeli sanctions. Abbas arrived in the Gaza Strip on Sunday night for talks with Haniyeh and other Hamas leaders on the formation of a new cabinet. Speaking to reporters at his home in the Shati refugee camp in the Gaza Strip shortly after Hamas nominated him as its candidate for the post of PA prime minister, a defiant Haniyeh said: "These [Israeli] measures won't frighten our people and the new cabinet. We are capable of dealing with future challenges as we have done in the past. Our people won't succumb." Haniyeh condemned the Israeli cabinet's decision as an attempt to "bypass the will and democratic choice of the Palestinian people." Israel would be held responsible for the "big vacuum" resulting from the collapse of a Hamas cabinet, Khaled Suleiman, a spokesman for Hamas in the West Bank, told The Jerusalem Post. "The Israeli measures are unjustified," he said. "Hamas was elected in a democratic process and in accordance with the road map." A senior PA official here revealed that some European countries and international organizations had suspended financial aid to several projects in the West Bank and Gaza Strip in the aftermath of Hamas's victory in the January 25 parliamentary election. He said the governments of Denmark and Holland were the first to freeze the funding of projects. "The Palestinians are paying a heavy price for electing Hamas," he said. "The financial and economic embargo could trigger a new wave of violence. The situation is very dangerous." Another official expressed deep concern that cutting off financial aid to the Palestinians would play into the hands of Hamas. "Such punitive measures will drive more people into the open arms of Hamas," he said. "This is a big mistake."