Israeli Acting Prime Minister Ehud Olmert said on Tuesday that he did not rule out the possibility of holding peace talks with the Palestinians despite the decision to refrain from contacts with a Hamas-led Palestinian government.

"The chances of reaching a quick agreement with the Palestinians are smaller now that Hamas is in charge, but the hope has not disappeared and I am responsible for both things-- the battle against Hamas and maintaining hope and the chance to reach an agreement," Olmert was quoted by local newspaper Ha'aretz as saying.

He said that for the time being, coordination between Israel Defense Forces and the Palestinian National Authority (PNA) still continued, but Israel would review this practice if Hamas took control of the PNA's security forces.

On Sunday, Olmert declared at a cabinet meeting that Israel would cut all ties with the Palestinian government if Hamas led or participated it.

The Israeli cabinet also decided to halt the transfer of tax money to the PNA as a set of restrictive measures against Hamas' rising in power.

Hamas, or the Islamic Resistance Movement, won the Jan. 25 Palestinian legislative elections by a landslide and is expected to form a new Palestinian government in the coming weeks.

The group has started talks with various Palestinian factions in the parliament over the formation of the new government.

Source: Xinhua