The moderate Palestinian president publicly warned Hamas militants on Monday that he has the authority to bring down their month-old government and told them it was high time they recognized Israel.

President Mahmoud Abbas' warning, which raised the stakes in his fierce power struggle with Hamas, drew a stern threat from the militant group to call off its 15-month-old truce with Israel.

"Being ousted from power will have a heavy price for everyone," a senior Hamas official in the West Bank said. "We hope not to reach that point."

The militant group's refusal to renounce its violently anti-Israel ideology has severely undercut the Palestinians' international standing, and more critically, has led to a cutoff of desperately needed funds from Israel and the West. Abbas, who was elected separately last year, has warned since Jan. 25 elections that Hamas' anti-Israel policies could bring the Palestinian people to ruin.

"The constitution gives me clear and definite authority to remove a government from power, but I don't want to use this authority. Everyone should know that by law this power is in my hands," Abbas said in a televised interview.

The senior Hamas official, who spoke on condition of anonymity because he was not authorized to speak to the media, said the group would "not leave in silence" and threatened to stop recognizing a truce with Israel that Abbas brokered in February 2005.

"We will go, but we will not recognize the Palestinian political regime," he said. "We will not participate in any new election and we will go underground as we did before and we will not adhere to any commitments, any truce, by anyone."

An Israeli government spokesman, Raanan Gissin, dismissed Hamas' threat to breach the truce, saying the militant group had never recognized it. Although it suspended its suicide bombing campaign after the cease-fire was reached, Hamas was in league with other militant groups that did attack Israel, Gissin charged, "and it never renounced terrorism."

A spokesman for the Hamas-led government, Ghazi Hamad, said Abbas should not have warned Hamas he could disband the government, sworn in on March 29, so early in its tenure.

"We expect from President Abbas to protect his government and not to make such declarations," Hamad said, in an interview from Gaza City.

Aides to Abbas said his warning was directed at Khaled Mashaal, the Hamas leader who accused the Palestinian president last week of "plotting" against the militant group.

Abbas doesn't plan to dissolve the government soon, and will do so only if the economic situation in the territories becomes catastrophic, they said.

Under Palestinian law, if Abbas dissolves the government, he would ask someone else to try to form a Cabinet, which would need approval from the legislature. Since Hamas controls the legislature, it's unlikely he could do this. Once Abbas determines there is a stalemate, he has the authority to order new elections.

Abbas also said Hamas must negotiate with Israel unless it wanted to mire the Palestinian people in a financial catastrophe.

"Hamas has to face the facts and establish communication with Israel," he said. "I'm worried that the situation will turn into a tragedy in the near future. A short time later we could be up against a great hunger disaster in Palestine."

The Palestinian leader vowed to work to solve the Israeli-Palestinian crisis with or without Hamas.

"Hamas can support me or not. When I find a way to a solution with Israel, I'll present this to the Palestinian people in a referendum," he said.

Mushir Abu Masri, a Hamas lawmaker in Gaza, denounced Abbas' call on Hamas to negotiate with Israel.

"Our people voted as they did in the election in order to avoid the previous [government's] experience, which brought us to deadlock," Abu Masri said. "Such statements will give some parties an additional pretext to tighten their siege on the Palestinians for their democratic choice."

The West, which provides the Palestinians with roughly $1 billion in annual aid, has cut off some of that funding to protest Hamas' refusal to moderate. Palestinian officials say U.S. pressure on international banks has kept Arab governments' money from reaching the Hamas government.

Israel has also squeezed the Palestinians financially by withholding monthly transfers of some $55 million in taxes it collects on behalf of the Palestinian Authority.

The cash crunch has left the Hamas government unable to pay the 165,000 people on its payroll — including about 80,000 security forces, many of them armed and loyal to Abbas.