The Bush administration will reduce a proposed $86 million security assistance package to the Palestinian government in an effort to see that none of the money ends up with forces loyal to the radical Hamas movement.

As she prepares to visit the Middle East later this week, Secretary of State Condoleezza Rice said Wednesday she would soon send Congress a revised package that will ensure only security elements loyal to moderate Palestinian President Mahmoud Abbas receive the aid.

"I have reformulated the plan, its almost ready to come to you," Rice told lawmakers. "It will request less money, precisely because some of the money I would have requested I could not fully account for."

She did not provide specifics of the reduction but said the new plan would leave intact a "firewall" aimed at keeping the money away from Hamas, a partner in the new Palestinian unity government established last weekend.

Rice said U.S. officials were in the final stages of examining the new Palestinian security apparatus and its command structure so that funds will not end up with extremists.

Testifying before a House subcommittee that controls foreign aid, Rice said the inclusion of Hamas in the government posed a challenge to Middle East peacemaking because of its refusal to recognize Israel and reject violence to achieve its aims.

"Frankly, the formation of the Palestinian unity government has provided something of a challenge," she said. "The United States is not prepared to change its assistance policies toward this government because it does not recognize those foundational principles."

Hamas, which controls most of the Palestinian government, is considered a terrorist organization by the United States, European countries and Israel.

Rice said the U.S. remained committed to peace and would carry on contacts with Abbas, also known as Abu Mazen, and other moderates in his administration. She said her trip to the region, starting Friday, would demonstrate that.

"I think it is extremely important to show American commitment to a political horizon so that the Palestinian people can see their future rests with moderate forces like Abu Mazen, not with those forces that are extreme," Rice said.

Rice uses the phrase "political horizon" to refer to the long-range goal of creating a Palestinian state that would coexist with Israel.

"We will not suspend our contacts with those in the Palestinian government who have a record of fighting for peace," she said.

Her comments came a day after a senior U.S. diplomat met the Palestinian finance minister, a moderate, in the first direct U.S. talks with the Palestinian government since its weekend formation.

Israel has said it will not deal with the government and Tuesday's meeting was seen by many as a sign of a rift between Washington and its top Mideast ally.