Progress will be made on the U.S.-backed "road map" for peace, with or without the cooperation of new ruling party Hamas, Palestinian and Israeli leaders said.
"I am committed to implementing [the] program on which you elected me a year ago," Palestinian Authority leader Mahmoud Abbas said in a televised address Thursday night. "It is a program based on negotiations and peaceful settlement with Israel."
Israeli Acting Prime Minister Ehud Olmert said his country would not recognize the Palestinian government so long as it included members of Hamas, a terrorist group responsible for numerous attacks on Israelis.
"The state of Israel will not negotiate with a Palestinian administration if even part of it is an armed terrorist organization calling for the destruction of the state of Israel," he said in a statement.
Israeli Defense Minister Shaul Mofaz said Abbas must keep his commitments to disarm militants, saying the road map is the "only existing path."
Abbas, who co-founded the now-minority Fatah Party with the late Yasser Arafat, hinted that future negotiations with Israel would be conducted through the Palestine Liberation Organization, a possible bypass of a Hamas-led government.
"We are going to reactivate the role of the PLO," said Abbas, who has been PLO chairman since Arafat's death in late 2004.
The PLO was founded as the umbrella group of Palestinian organizations several decades ago, but its importance has withered since the establishment of the Palestinian Authority in 1994. Whether Abbas' proposal met Israel's conditions for ongoing negotiation had yet to be sorted out.
Abbas was making his first public remarks hours after a shocking victory for Hamas in the first Palestinian parliamentary elections in a decade was declared, catching both winners and losers off guard.
Official election results came in Thursday, with Hamas picking up 76 seats in the 132-seat parliament and Fatah winning just 43. The 13 remaining seats went to several smaller parties and independents.
Abbas also announced he was taking steps to form a new government. Palestinian Prime Minister Ahmed Qureia and his Cabinet ministers resigned early Thursday after Fatah's defeat became apparent but before the official results were announced.
The top Hamas leader, Khaled Mashaal, had also told Abbas his group was ready for a political partnership. The outgoing Cabinet will remain in power in the interim.
Fatah, which has enjoyed one-party rule for years, was thought to have beaten first-time challenger Hamas after polls closed Wednesday night. It was not until Thursday morning that it became apparent the exit polls were wrong and the terrorist group would be replacing the secular ruling party.
"This is the choice of the people. It should be respected," Qureia said before the official results were announced. "If it's true, then the president should ask Hamas to form a new government."
Leaders of Fatah were debating whether to establish a partnership coalition with Hamas — something the new ruling party indicates it wants — or to take on the role of loyal opposition. Though dramatic, the election outcome was in many ways a default win for Hamas, as most of its votes came from Palestinians weary of sluggish political and economic development under Fatah.
Supporters of the two main parties briefly scuffled in Ramallah after Hamas supporters raised their party's green flag over the parliament. The two sides threw stones at each other, breaking windows in the building, as a small group of Fatah supporters tried to lower the banner. The crowd of about 3,000 Hamas backers cheered and whistled as activists on the roof raised the flag again.
In order to stay in power, Hamas will likely have to show real progress on strengthening infrastructure in the occupied territories and creating more jobs and services.
"They won partly because the incumbent is [governing] so badly, and partly because they were doing so well at providing social services, welfare benefits and so forth to individual Palestinians," said Michael O'Hanlon of the Brookings Institution think tank in Washington.
O'Hanlon told FOX News he doubted Hamas could "generalize" its skills to govern the entire population. Hamas' duties will be further complicated when international aid comes to a standstill, as is widely expected.
President Bush on Thursday said he could not foresee the peace process moving forward with Hamas in control of the Palestinian government.
"I don't see how you can be a partner in peace if you advocate the destruction of a country as part of your platform," Bush said in a White House press conference. "A political party that articulates the destruction of Israel as part of its platform is a party with which we will not deal," he later added.
The international "Quartet" — comprising the United States, United Nations, Russia and European Union — that has been actively involved in peace negotiations echoed the president's demands.
"The Quartet reiterates its view that there is a fundamental contradiction between armed group and militia activities and the building of a democratic state. A two-state solution to the conflict requires all participants in the democratic process to renounce violence and terror, accept Israel's right to exist, and disarm, as outlined in the 'road map,'" the group said in a statement.
The United States, EU and United Nations Relief and Works Agency for Palestine Refugees contribute billions to help Palestinians with basic needs, government reforms in the Palestinian Authority, and social services and facilities. Nearly 350,000 Palestinians are refugees, and 47 percent of the population lives below the poverty line.
In fiscal year 2005, the United States gave Palestinians nearly $370 in aid, directly and through relief organizations. The EU earmarked $838 million, and the UN contributed $17.8 million through UNRWA. The Group of Eight leaders pledged $3 billion to assist in reconstruction following Israel's withdrawal from Gaza.
The United States, which has poured $1.7 billion into the region since 1993 and is the Palestinians' most generous individual donor, can be expected to cut off assistance to a Hamas-run government. Other donor countries have indicated they will follow suit.
Several world leaders indicated they would be willing to deal with the new Palestinian government only if Hamas rejected its anti-Israel charter and joined the world community in recognizing Israel as a sovereign nation.
Hamas leader Mahmoud Zahar said his group would be willing to extend a year-old cease-fire with Israel. But, he added, there should be no expectations Hamas would pick up where Fatah leaves off in peace negotiations.
"We have no peace process," he said. "We are not going to mislead our people to tell them we are waiting, meeting, for a peace process that is nothing."
Israeli politicians from across the political spectrum said Hamas' victory effectively killed the peace process.
"Hamas isn't capable of truly abandoning the goal of destroying Israel without disintegrating, because the whole purpose of Hamas is the liquidation of the state of Israel and pursuing it through terror," said Benjamin Netanyahu, leader of the opposition Likud Party.
The former prime minister also took at jab at the current Israeli leadership, which he has criticized for negotiating at all with the Palestinians.
"We have to stop the policy of unilateral withdrawals, which rewards terror, and go back to the policy of strength and deterrence, which blocks terror and blocks the rise of Hamas," he told FOX News.
Hamas has said it wants control of service ministries such as those for health, education and welfare, which have been beset by corruption and mismanagement under Fatah's rule. The party also said it was content to leave the peace process to Abbas, though Abbas has said he would sooner step down than deal with interference from the Cabinet over negotiations.
Members of the international "Quartet" have been privately frustrated with Abbas' performance, particularly that pertaining to reining in violence against Israel. But being forced to don the hat of law and order may better position Hamas to pressure militant groups to disarm, observers say.
Whether the new Palestinian leadership elects to move forward on the road map also depends on if Fatah agrees to a partnership with Hamas. Without Fatah's relatively moderate voice, Hamas may simply adhere to its extreme anti-Israel position and abandon the road map altogether.
And in order to get anything significant done, Abbas, who remains president, will need approval from the Cabinet and legislature. Abbas has long resisted forcing Hamas and other militant groups to disarm, preferring instead to rely on negotiations so as not to instigate what he predicts would be a civil war.
Hamas' victory is troubling to the United States and its pro-Mideast peace allies, many of which give millions in aid to the impoverished Palestinians but do not deal with terrorist groups in an official capacity. Secretary of State Condoleezza Rice said Washington would stick to its policy of refusing to deal with Hamas unless changes were made.
"As we have said, you cannot have one foot in politics and the other in terror," Rice said in a press conference Thursday morning. "Our position on Hamas is, therefore, not changed.
In a rare show of unity, Republican and Democrat political leaders expressed alarm about the election outcome and reiterated their support for Israel.
“The elections results amount to a de facto declaration of war by the Palestinian people against the state of Israel. It’s imperative our nation redouble its commitment to the state of Israel and cautiously evaluate any future assistance to a Palestinian regime governed by terrorists,” said Sen. Lindsay Graham, R-S.C.
"Hamas is a terrorist organization, which means they believe it is their right to murder women, children and innocent civilians to achieve their goals. It is unrealistic, unwise and even immoral to ask Israel to sit down with a government that contains people who have such beliefs," said Sen. Charles Schumer, D-N.Y.
Hamas' charter calls for the destruction of Israel, and leaders said they had no plans to change it. But the group risks economic devastation resulting from loss of international aid if it refuses to budge.
In an indication of some flexibility, Hamas politicians carefully avoided anti-Israel rhetoric while campaigning. Moreover, candidates ran under the party name Reform and Change, calling for an end to corruption.
Washington had no plans to contact Hamas. Rice said she had called Abbas as well as U.N. Secretary-General Kofi Annan and Israel's Foreign Minister Tzipi Livni.
Abbas' office said she told him that the Bush administration "will continue supporting the elected president and his policies," said Nabil Abu Rdeneh, an Abbas aide.
International observers, led by former President Carter, said the elections were "well-administered."
Italian Premier Silvio Berlusconi, according to news reports, called the outcome a "very, very, very bad result." Benita Ferrero-Waldner, the EU external relations commissioner, said Hamas must be "ready to work for peace" with Israel if it joins the Palestinian government.
Annan said any group that participates in a democratic process should "ultimately disarm." Otherwise, he said, there was a "fundamental contradiction."
Hamas capitalized on widespread discontent over years of Fatah corruption and ineffectiveness. Much of its campaign focused on internal issues while playing down the conflict with Israel.
Before the election, Hamas had suggested it would be content as a junior partner in the next government, thus avoiding a decision on its relationship with Israel.
Throughout the campaign, leaders sent mixed signals, hinting they could be open to some sort of accommodation with Israel. Now it will have to take a clearer position on key issues, including whether to abandon its violent ideology.
Half the seats at stake were chosen on a national list and the other half by districts. While the national voting appeared to be close, election officials said Hamas had won a large majority in the district races. Hamas apparently took advantage of divisions in Fatah; the long-ruling party fielded multiple candidates in many districts, splitting the Fatah vote.
Palestinian pollsters were at a loss to explain the discrepancy between the exit polls and the actual results. It may have been partly due to reluctance by some voters to admit to pollsters that they were abandoning the ruling party.
The errors appeared especially glaring in the district races, where smaller numbers of voters were polled.
Turnout for Wednesday's vote was heavy, with nearly 78 percent of 1.3 million eligible voters casting ballots.
FOX News' Jane Roh and The Associated Press contributed to this report.