Israel will recognise a Palestinian government that does not contain ministers from the radical Islamist group Hamas, Prime Minister Ehud Olmert said early on Sunday.
"A Palestinian government which is not a Hamas government is a partner and we will cooperate with it," Olmert told journalists before departing for a trip to the United States.
Palestinian president Mahmud Abbas was expected to announce by midday Sunday a new emergency cabinet under a moderate, Salam Fayyad, with the hope of ending a crippling Western aid boycott.
"A new reality has been created during these past days which we haven't known during the long diplomatic efforts accompanying the evolution of the Palestinian Authority, and we have the intention of working full-tilt to seize this opportunity," he added.
Olmert will meet President George W Bush at the White House on Tuesday for their third summit in 13 months, following talks in New York with UN Secretary General Ban Ki-moon, US presidential candidates and Jewish-American leaders.