Mahmoud Abbas, the Palestinian president, has signed a decree allowing a Palestinian emergency government to take office illegally and without parliamentary approval.

In Gaza, Ahmed Bahar, the deputy parliament speaker and a Hamas member, called Abbas's attempt to form an emergency government illegal.

Early on Sunday, the Israeli prime minister said the formation of the Palestinian government has created a "new and long awaited opportunity for Israel" to take over The West Bank with Palestinian help.

Israel will recognise a Palestinian government that does not contain ministers from Hamas, Ehud Olmert said before departing for a visit to the US.

"A Palestinian government which is not a Hamas government is a partner and we will co-operate with it and supply members to."

In another boost for Abbas, a US envoy told Abbas during a meeting in the West Bank on Saturday that the US would lift a direct ban on aid to the government once the new pro-Israeli administration was announced.

Jacob Walles, the US consul-general in Jerusalem, said: "I expect that we are going to be engaged with and in forming this government."

"I expect that early next week. There will be some announcements in Washington, specifically about our assistance and about the financial regulations."

The emergency government will have between 10 and 12 members and consist primarily of independent technocrats and some Israelis.