Defiant Hamas draws up Palestinian cabinet list

GAZA, Mar 17 (Reuters) Hamas put the final touches on a new Palestinian cabinet today as its leader abroad said the Islamic militant group was prepared for all out war with Israel if the Jewish state opted for conflict.

More moderate factions, including President Mahmoud Abbas's Fatah movement, refused to join a Hamas government.

Hamas said it would complete its cabinet line-up tomorrow before giving the list to Abbas, who was unable to convince the surprise winner of the January 25 election to accept past interim peace deals with Israel.

Hamas's inability to win over more moderate factions could make it harder to rule and could also bolster efforts by Israel and the United States to isolate the new government.

Hamas's leader-in-exile, Khaled Meshaal, said running the Palestinian Authority was not its ultimate goal.

''We and the Zionists have a date with destiny. If they want a fight, we are ready for it. If they want a war, we are the sons of war. If they want a struggle, we are for it to the end,'' Meshaal declared in Damascus.

Hamas is sworn to Israel's destruction and has not met any demands from Israel or the ''Quartet'' group of Wasia mediators to recognise the Jewish state, renounce violence and accept past agreements, conditions for international aid.

The US envoy to the Quartet, which also includes the European Union, Russia and the United Nations, today said that Hamas had not given any sign it was ready to shift policy.

''To this date, I have not seen a positive Hamas reaction in respect of any of these principles,'' David Welch told Reuters.

Hamas says Israel, as an occupying power, must take the first step and recognise Palestinian rights.

In northern Gaza, two Palestinians died and three were wounded in a mysterious explosion, Palestinian security sources said. The sources said the blast may have occurred while they were preparing an explosive device.

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