Israel, new Palestinian government open contacts

JERUSALEM, June 20 (Reuters) Israel and the new Palestinian government headed by Prime Minister Salam Fayyad opened formal high-level contacts today, marking an end to Israel's 15-month-long boycott of the Palestinian Authority.

An Israeli Foreign Ministry statement said Foreign Minister Tzipi Livni told Fayyad that establishment of his emergency government, replacing one headed by Hamas, would allow ''progress on various issues ... as well as advance the political process''.

Livni's conversation with Fayyad was the first publicly disclosed contact between the two sides since Fayyad's emergency government was sworn in over the weekend.

Palestinian President Mahmoud Abbas, the Fatah leader, disbanded a Hamas-led government last week after the Islamist group's violent takeover of the Gaza Strip.

Abbas then appointed Fayyad's emergency government, which has won pledges of financial support from major Western powers who had imposed a crippling economic embargo on the Palestinian Authority after Hamas came to power in March 2006.

Israel boycotted the Hamas-led government because the militant group refused to recognise Israel, renounce violence and abide by interim peace deals.

Reuters AK VV1726