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Jerusalem – The United States made its first contact with the new Hamas-Fatah coalition Tuesday, ending a year-long diplomatic boycott of the Palestinian government.

The meeting between a U.S. diplomat and the Palestinian finance minister signaled a break in policy between Israel and its closest ally and could mark a significant step toward ending a painful aid cutoff to the Palestinian government.

Jacob Walles, the U.S. consul in Jerusalem, made a 6-mile drive to the West Bank city of Ramallah, where he met with Salam Fayyad, an internationally respected economist and political independent.

“This meeting was part of my contacts with the international community,” Fayyad told The Associated Press.

Fayyad, a former World Bank official, is leading Palestinian efforts to end international sanctions imposed a year ago when the Islamic militants of Hamas won an election and set up a government.

The U.S., the European Union and Israel label Hamas a terrorist group and ban contact with it.

Hamas still holds the most seats in the new unity Palestinian Cabinet, including the post of prime minister. But the addition of prominent figures like Fayyad to the team has brought into question the concept of boycotting the whole Cabinet, as Israel is doing.

In Washington, State Department spokesman Sean McCormack said the meeting was in accordance with U.S. policy.

“We weren’t going to cut off contacts with those individuals with whom we had previously had contact,” he said. “I know the Israeli government has a different view in this regard.”

Israel itself often sent officials to talk with Fayyad when he served as finance minister in a previous Fatah-led Cabinet. Israel and the West also have maintained contact with Palestinian President Mahmoud Abbas, a Fatah moderate elected separately from the Hamas-dominated parliament.

Israel has been adamant about imposing a total ban on the new unity government. Israeli Prime Minister Ehud Olmert even ruled out peace talks with Abbas, saying contacts would be limited to humanitarian issues.

Israel also urged the U.S. and Europe to keep up the diplomatic and aid bans, but both indicated plans for some contact.

U.S. officials said they would meet individually with non-Hamas officials.

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