Israel won't target Palestinian govt over bombing

JERUSALEM, Apr 18 (Reuters) Israel's interim government decided today to hold the Palestinian Authority responsible for a Tel Aviv suicide bombing, but not to authorise military action against the Hamas government, a political source said.

Acting Prime Minister Ehud Olmert, after consulting with his his cabinet and security chiefs yesterday's attack, decided to limit Israel's response for now, the source said.

Among measures authorised was the revocation of the Israeli residency status of Hamas officials living in East Jerusalem and a police crackdown on the smuggling of Palestinians without permits, who could be militants, into the Jewish state.

Hamas stirred up Israeli and Western ire by calling the bombing by kindred militant group Islamic Jihad an act of ''self defence''. Some Israelis called the attack the opening shot in a fresh confrontation with Hamas, which took power three weeks ago.

But Olmert is also under pressure not to undermine US-led efforts to isolate Hamas diplomatically and financially unless it renounces violence and recognises Israel.

REUTERS OM PC1638