Updated

The Palestinian group Hamas (search), responsible for several bloody attacks on Israel, is engaged in a massive buildup of manpower and weapons and must be dismantled by Mahmoud Abbas' (search) Palestinian Authority, Israeli Ambassador Daniel Ayalon says.

"They have taken a tactical decision to keep terror on a low flame but not stop it entirely," Ayalon said of Hamas, which remains a potent force in Gaza as Israel withdraws from the territory and part of the West Bank.

"But we observe a very massive buildup with recruitment and training of new terrorists, of mobilizing more financial support and explosive munitions, and having the cells ready and the chain of command ready," Ayalon said in an interview Tuesday at the Israeli embassy.

"This is literally a ticking bomb that can explode whenever they find it suitable to their purposes," he said.

The Israeli diplomat said Hamas is a threat to the Palestinian Authority (search) as well as to Israel and does not have the support of a majority of the Palestinian population.

Ayalon also disputed the assertion of some Palestinian leaders that they do not have the strength to take on Hamas and that that is due, in part, to Israeli forays into the West Bank and Gaza in past years to disable the Palestinian security setup.

"Do they have the means to do it?," Ayalon said. "Absolutely. The Palestinian Authority has the support of the Palestinian people and has the manpower and weapons. There are 60,000 security people on the payroll, and that outnumbers Hamas 30 to 1."

In Gaza, Hamas is portraying Israel's withdrawal as a retreat forced on Prime Minister Ariel Sharon (search) by pressure from the group that the U.S. State Department for years has denounced as a terrorist organization.

Abbas has publicly ruled out force against Israel and the chief Palestinian negotiator, Saeb Erekat (search), said this week the Palestinian Authority must maintain the rule of law.

The Authority has said it would deploy a 5,000-strong force to stop Hamas and Islamic Jihad from making it look like Israel is retreating under fire.

The Bush administration, meanwhile, has called repeatedly for the dismantling of Hamas, as prescribed in the first stage of the multinational "road map" for peacemaking that has the support of the United States, the United Nations, the European Union and Russia.

But Hamas remains intact, and aspiring to a political future in elections now planned for January.

"It is a grave security threat to us and also a great challenge to the authority of the Palestinian Authority," Ayalon said. "It is no question they have to be dealt with in a decisive way, that is, dismantling, collecting the arms and outlawing anybody who deals with terror."

On another issue, the ambassador said Israel had no objection to the United States providing financial assistance to the Palestinians.

But he said it should be done in the open and with oversight.

In the past, when Yasser Arafat was in charge, Ayalon said, "the money disappeared or was used for the wrong purposes, to purchase arms and to pay suicide bombers."