Israel said Monday it will not hold peace talks with Palestinian President Mahmoud Abbas because he is powerless to enforce agreements while the Islamic militant group Hamas controls his government, signaling a hardening of Israel's position and a growing rift with the United States.

The United States and European Union have suggested they will keep working with the moderate Abbas even after a Hamas government takes office in coming weeks.

Also Monday, an explosion rocked an arms development center during a test in northern Israel, injuring at least six people, police and medics said.

The loud blast at Rafael, the weapons development arm of Israel's Defense Ministry, was heard across Haifa Bay in the northern part of the country. Ambulances raced to the scene.

Moshe Weizman, a regional police spokesman, said the blast was an accident, not a terrorist attack. "We don't know exactly what, a chemical that blew up in a bottle," he told Israel Army Radio.

Officials at Rafael declined comment.

Meanwhile, EU foreign ministers on Monday were expected to approve continued aid to the Palestinian caretaker government. That could include paying $48 million to help run utilities and authorizing the World Bank to unblock around $60 million to pay the salaries of Palestinian Authority employees.

Israeli Defense Minister Shaul Mofaz, meanwhile, listed the Jewish settlement blocs in the West Bank he believes should be annexed as Israel draws its final borders. Most of the settlements he named are relatively close to Israel, but also included Ariel, deep in the West Bank, as well as the Jordan Valley, on the border with Jordan.

The Palestinians want all of the West Bank for their state, and the United States has blocked Israel's plans to include Ariel, a settlement of about 17,000, on the "Israeli side" of its West Bank separation barrier, a possible future border.

Hamas' election victory last month has forced the world to deal with a situation in which the Palestinians have a moderate president, but a Cabinet and parliament dominated by a group sworn to Israel's destruction.

Hamas' designated prime minister, Ismail Haniyeh, said in an interview published Monday that his government would not negotiate with Israel, but said he was ready to discuss day-to-day issues with the Israeli authorities. "Hamas will move to open channels in this direction," he told the Palestinian daily Al Quds.

Under Palestinian law, the Palestine Liberation Organization, headed by Abbas, conducts peace talks with Israel, while the Cabinet is in charge of running the Palestinians' daily affairs.

The issue of how to deal with Abbas and a Hamas-led government was the main topic at a meeting Sunday between Israeli Foreign Minister Tzipi Livni and U.S. envoy David Welch. Israel Radio reported that Welch presented a policy in which the United States would work directly with Abbas instead of the Hamas-led government.

Without referring to the radio report, Micaela Schweitzer-Bluhm, a U.S. consulate spokeswoman in Jerusalem, said that "we remain fully committed and supportive of him (Abbas)."

Livni disagreed. The moment Abbas, widely known as Abu Mazen, appointed Hamas to form the new government, the Palestinian Authority became "illegitimate," she told Israel Army Radio on Monday.

Israel does not want to be in a situation in which it is dealing with Abbas, who is "more moderate, believes in two states ... but is powerless to deliver the goods or enforce it on the Palestinian Authority," Livni said.

"There were elections, the Hamas won. All the attempts to embrace Abu Mazen ... will not help," Livni said.

Palestinian negotiator Saeb Erekat called Livni's remarks "totally unacceptable."

"The Israelis are trying to undermine the Palestinian people in general because they don't differentiate between one Palestinian and the other," said Erekat, a member of Abbas' Fatah party, which was ousted from power in the January elections.

Israel, the United States and the European Union consider Hamas a terror group. Hamas has launched dozens of suicide bombings that have killed hundreds of people.

Israel and the so-called Quartet of mediators — the United States, the United Nations, the European Union and Russia — are demanding that Hamas disarm, recognize Israel and accept past Israeli-Palestinian peace agreements. Hamas has so far rejected these conditions.

Should Hamas decide to accept the conditions, it would bring Israel and the Palestinians on track to implement the internationally backed road map peace plan, Livni said.

Haniyeh said Monday the group's military wing would only disarm if Israel withdraws from the West Bank, Gaza Strip and east Jerusalem, the areas it captured in the 1967 Mideast War.

Israeli Prime Minister Ariel Sharon, meanwhile, turned 78 Sunday, visited by his sons and well-wishers at Jerusalem's Hadassah Hospital. Sharon, who has been in a coma since suffering a stroke Jan. 4, remained in critical but stable condition.

He has undergone seven operations, including three brain surgeries, since being hospitalized. With each passing day, doctors say, his chances of regaining consciousness diminish.

"A sad birthday," read a headline on the front page of the Yediot Ahronot daily.