By Nidal al-Mughrabi GAZA, Nov 14 (Reuters) - The ruling Islamic militant group Hamas said on Tuesday a planned Palestinian unity government would not recognise Israel or accept a two-state solution to the Middle East conflict. Hamas's stance could undercut Palestinian efforts to form a unity government acceptable to Israel and its closest ally, the United States, casting doubts on whether an eight-month-old Western economic boycott would be lifted. Hamas spokesman Fawzi Barhoum said the agenda of the proposed unity government between Hamas and President Mahmoud Abbas's Fatah faction "will not recognise Israel and will not include accepting the two-state solution." "We reject the two-state solution, which is the vision of U.S. President George Bush, because it represents a clear recognition of Israel," Barhoum said. "Our position in this regard remains unchanged. We reject joining in any government that recognises Israel." A U.S.-educated Palestinian academic is the top candidate to replace Prime Minister Ismail Haniyeh of Hamas as part of the proposed unity government. Mohammad Shbair, 60, the former head of the Islamic University in Gaza, is considered close to Hamas but he is not a member of the group. The United States and the European Union regard Hamas as a terrorist organisation and have cut off direct aid to its administration. As a result, the Palestinian government has largely been unable to pay its 165,000 workers since April. Washington and Brussels have demanded Hamas recognise Israel's right to exist, renounce violence and abide by existing peace agreements with Israel if it wants to be recognised.
