Israel has made life economically tougher for the new Hamas-led Palestinian Authority. Prime Minister Ehud Olmert has confirmed a series of measures announced on Friday will be implemented, but they are weaker than first proposed. This may be due to an American warning that extra hardship for the Palestinian people should be avoided.However Olmert used the strongest of words to describe the new authority, and it appears the two sides are heading for confrontation. Olmert has held back from slapping a total ban on workers entering Israel, or travelling between Gaza and the West Bank, but checks at border crossings, already time-consuming and extensive, will be stepped up. Of far more impact will be Israel’s refusal from today to fund what it now calls a “terrorist authority and enemy”. It will retain all customs duties it collects for the Palestinians, some 42 million euros a month. Without this money Hamas may struggle to pay just the salaries of the authorities’ 140 000civil servants. Hamas’s Ismail Haniyeh was formally proposed as Prime Minister today, and he is meeting President Mahmoud Abbas for the first time with the formation of a national unity government on the agenda. This would share power with Abbas’s Fatah party, but it is unsure if any agreement will be reached. Hamas has also settled on a new parliamentary speaker, Aziz Dweik. He met the president today. Dweik said it was a good meeting, with both sides opening their hearts and expressing unity. For the moment it appears neither side wants to be blamed for a showdown.