"We accept Islamist parties if Islamist parties accept the rules of the game," William Jordan, head of the State Department's North Africa bureau, said. "It's up to Hamas to decide whether to accept the rules of the game."

Officials acknowledged that the new administration policy departed from the State Department ban on Hamas as a terrorist organization. Under federal law, the United States and its citizens are banned from supporting or engaging a group deemed terrorist.

Under the new policy, officials said, the administration would still avoid directly dealing with Hamas. Instead, the United States would encourage Western and Arab donors to finance the PA under Hamas control.

The new policy was formed amid consultations with Arab and Western allies regarding the Hamas victory. Officials said none of the allies was willing to end funding to the PA. Instead, Egypt and Saudi Arabia assured the administration that they would pressure Hamas to maintain stability through 2008.

"The idea is for the United States to remain relevant," an official said.

At the same time, officials said, the administration would seek waivers of U.S. law that would enable U.S. humanitarian and development aid to the Palestinians. They said President George Bush would issue such a waiver over the next few months.

"We want to use our leverage to have Hamas make the right choice, and that that framework will be guiding all of our decisions," State Department deputy spokesman Adam Ereli said.

Ereli told a briefing on Feb. 27 that the United States was encouraging the European Union and Arab states to immediately pump money to the PA. He said the United States also planned to relay unspent funds for fiscal 2005 to the PA before Hamas formally entered power.

The United States plans to allocate $143 million to the PA over the next few weeks, officials said. Of that figure, $50 million has already been sent to the PA but never spent. The administration has asked the PA to refund the money, but so far has not done so.

Ereli stressed that the United States was willing to work with a Hamas-led government. He did not rule out Hamas — which preaches the destruction of Israel — as a partner in U.S.-led efforts to establish an independent Palestinian state by 2009.

"The purpose of Welch's visit," Ereli said, "and the subject of his discussions are focusing on the fundamental issue, which is: How do we get Hamas to make the right choice? How does the leadership of the PA do that? How can we work with the Israelis and the neighbors and the international community to confront a situation and deal with a situation which appears likely to come about where a government is in the hands of or has a significant presence of representatives of a terrorist organization and keep the focus on the goal we're working towards, which is an independent Palestinian state, and influencing and using leverage to affect the policies of terrorist organizations so we can create a reliable partner?"

At a conference by the French Institute of International Relations in Paris, Jordan envisioned Hamas as the harbinger of a spate of Islamic movements that seek political power in the Arab world. He did not express U.S. objections to an Islamic takeover of Arab regimes.

"It's a question of extremism and its eventual effects on a democratic system," Jordan said.

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