New Palestinian Prime Minister Ismail Haniyeh criticized the U.S. on Sunday for restricting diplomatic ties with the Hamas-led government, saying his people were being punished for electing the militant Islamic group.

Israel's coalition-building process officially began on Sunday, and the Kadima Party, in what is seen largely as a formality, asked Israel's president to tap acting Prime Minister Ehud Olmert to form the next government.

The U.S. announced Friday that American diplomats have been forbidden to make contact with officials in any Palestinian government agency controlled by Hamas, whose charter calls for Israel's destruction. The Islamic group's new Cabinet controls every government ministry.

State Department spokesman Adam Ereli said diplomats would maintain contact with Palestinian Authority President Mahmoud Abbas and lawmakers from his Fatah movement, which favors peace talks.

"This government was elected in a free and honest election, and according to the democratic principles the American administration is calling for," Haniyeh told a group of supporters who had come to his office to wish his new government well.

"We believe this is a punishment of the Palestinian people because of its democratic choice, and at the same time, it increases the people's suffering," he said.

Western powers and Israel are shunning Haniyeh's new government, sworn in last week, and are threatening to cut off desperately needed aid unless the group renounces its violent ideology. Although Hamas has largely adhered to a 14-month-old truce, it has rejected international calls to disarm and recognize the Jewish state.

Hamas' first few days in power have been a rocky combination of international pressure and domestic violence. On Friday, four people were killed and 36 wounded in unrest linked to the killing of a top militant with ties to Hamas. Haniyeh's appeal for calm and an end to public displays of weapons was rejected by a Gaza Strip strongman, raising the risk of new factional violence.

Gaza has been plagued by lawlessness in recent months, with gunmen roaming the streets with impunity. Many have ties to Fatah, which dominated Palestinian politics for four decades before Hamas trounced it in parliamentary elections in January.

The dead militant's followers accused Fatah of killing him in a car bombing.

Haniyeh and Palestinian Authority President Mahmoud Abbas discussed the growing lawlessness in a telephone call Saturday night.

Elsewhere, the Kadima Party, which won Tuesday's election, was the first to visit President Moshe Katsav, asking him to choose Olmert as the next prime minister. Other parties were to present their choices throughout the week, and Katsav was expected to make his decision by week's end, his office said.

The president, whose post is largely ceremonial, was expected to choose Olmert, whose faction will be the largest in parliament, having won 29 of 120 seats.

Although informal coalition contacts began immediately after the election, formal talks won't begin until Katsav makes his choice. The government, like every other government in Israel's 58-year history, will be a coalition because no one list won an outright majority of votes.

The dovish Labor Party, the second-largest movement with 20 seats, is Kadima's first choice for the coalition because of its size and because it can be counted on to support Olmert's plan to withdraw from most of the West Bank.

Also, Israeli police headed off a suicide bombing when they stopped a car trying to enter the northern town of Beit Shean, police said.

Two Palestinians were in the car, police spokeswoman Aliza Azoulai said without offering further details.

Security officials had said earlier they had information that two suicide bombers armed with explosive belts were traveling toward Beit Shean.

Police and rescue services were placed on high alert around the two cities, and roadblocks were set up to check passing cars, Azoulai said.