The Islamic militant Hamas moved a step closer Tuesday to taking power, winning overwhelming parliamentary approval for its 25-member Cabinet.

The parliament met as Israelis voted in a historic election billed as a referendum on the future of the West Bank. Incoming Palestinian Prime Minister Ismail Haniyeh said he opposes plans by the Israeli front-runner, acting Prime Minister Ehud Olmert, to draw the country's final borders by 2010.

However, Haniyeh toned down Hamas' militant ideology, saying he was not interested in perpetuating the cycle of violence with Israel. Hamas has killed hundreds of Israelis in suicide attacks in recent years, but has largely stuck to a truce for the past year.

"We're not calling for conflict or the continuation of the bloodbath in this region. We are a government that looks out for the interests of the Palestinian people," Haniyeh said.

But even as the Cabinet was approved, Gaza militants for the first time fired a Katyusha rocket into Israel, the Israeli army said. The launching of the Katyusha, which has twice the range of the Palestinians' homemade Qassam rockets and is deadlier, raised fears that rocket fire could reach the southern Israeli city of Ashkelon.

The militant group Islamic Jihad claimed responsibility and said the rocket attack, which caused no injuries, was timed to coincide with Israel's election. Israeli security officials said the rocket apparently was smuggled into Gaza from Egypt.

In Gaza City, Hamas lawmakers broke into chants of "God is great" after parliament voted 71-36, with two abstentions, to approve the new lineup. Palestinian legislators swarmed Haniyeh to congratulate him. After the vote, Haniyeh went to the house of Sheik Ahmed Yassin, the Hamas founder assassinated by Israel in 2004, to pray with other Hamas leaders.

On Tuesday evening, thousands of cheering and whistling Hamas supporters gathered at the parliament building in Gaza to celebrate the vote as Haniyeh stood on a balcony above and threw candy at the crowd.

"While elections are taking place in the Israeli entity, here the flags of the government of Hamas and the government of the Palestinians are rising high," he told the cheering crowd.

The new Cabinet is to be sworn in by Palestinian President Mahmoud Abbas later this week.

Olmert has refused to deal with Hamas' incoming Cabinet and in his victory speech Tuesday night, he appealed to the Palestinians to accept a scaled-back dream as Israel has — as quickly as possible.

If they don't, "Israel will take its fate into its own hands," he said. "The time has come to act."

Haniyeh said he opposed Olmert's plan to draw Israel's final borders, with or without negotiations with the Palestinians. Olmert wants to withdraw from large parts of the West Bank and dismantle dozens of small Jewish settlements, but annex the large settlement blocs.

"We said from the beginning that any Israeli step that will impose facts on the ground or undermine Palestinian rights, such as creating so-called temporary borders, is rejected and unacceptable policy," Haniyeh said.

Hamas is listed as a terror group by the United States and European Union, and Western countries have threatened to cut off aid to the cash-strapped Palestinian Authority once Hamas takes over.

Marc Otte, the European Union's special envoy to the Middle East, said the EU would only work with a Palestinian government that "agrees to the platform of peace."

The new Cabinet includes 20 Hamas members and five independents. Twelve ministers are from Gaza and 13 from the West Bank. One is a woman and one a Coptic Christian. Nine are engineers and the rest have university degrees in other fields. Fourteen have spent time in Israeli prisons.

The Gaza session was hooked up via video link to a simultaneous session in the West Bank city of Ramallah, where members of the incoming Cabinet lined up to receive congratulatory kisses from lawmakers. An Israeli travel ban between Gaza and the West Bank prevents the whole legislature from meeting in one place.

Haniyeh said he intends to push for an independent Palestinian state with its capital in Jerusalem and the right of Palestinian refugees to return to their homes in what is now Israel.

Those demands are far more moderate than Hamas' traditional call to replace Israel with an Islamic state. However, the group, which won Jan. 25 elections in a landslide, has stopped far short of accepting demands by the international community to renounce violence and recognize Israel's right to exist.

Haniyeh said the new government planned a tour of Arab countries "to secure aid for the Palestinian people and the government and the authority."