JERUSALEM, April 10 (JTA) Ehud Olmert is intensifying Israel’s political, military and economic pressure on the new Hamas-led Palestinian government, a strategy he hopes will force the terrorist group to change its ways or be overthrown. The aim is to isolate Hamas internationally, cut off direct funding to the Palestinian Authority and force the Palestinians to stop firing Kassam rockets at civilian targets in Israel. But it’s a risky game. If successful, it could lead to the collapse of the Hamas government and the emergence of a more pragmatic Palestinian leadership. On the other hand, some warn, it could cause chaos on the Palestinian side, and even spark a new intifada. Clearly feeling the heat, Hamas leaders have been looking for ways to alleviate the pressure. In messages to the international community, they have been trying give the impression of relative moderation. In secret communications to Israel, they have offered a limited cease-fire. But key players remain unimpressed. Moderate-sounding Hamas statements invariably are followed by denials, further alienating world leaders. And Israelis are wary of a cease-fire that could simply let Hamas off the hook, while allowing it to build up its forces for a major terrorist onslaught against Israel at a later date. On Sunday, Olmert convened top foreign policy and defense officials to update Israeli policy toward Hamas. The line he took was tough: Israel will have no ties with the Hamas-led Palestinian Authority, which it defines as a hostile entity; It will seek to prevent Hamas from becoming an established government; It will boycott foreign diplomats who meet Hamas officials; It will suspend coordination between the Israel Defense Forces and P.A. security forces; It will not transfer taxes it collects for the Palestinian Authority to the Hamas government; It will seek to coordinate with the international community ways of transferring humanitarian aid to the Palestinians without going through Hamas-run government agencies. Olmert’s policy makes a clear distinction between Hamas and P.A. President Mahmoud Abbas of the Fatah Party, who has not been blackballed in the same way. But though Israeli left-wingers have urged Olmert to establish a peacemaking channel to Abbas, Olmert says he has no plans to meet with him soon. Olmert’s tough talk is being backed up by strong military pressure, with Israeli artillery pounding areas of Gaza that Palestinians use to launch rockets at Israeli civilian targets and aircraft carrying out targeted killings of leading terrorists. Economic pressure also is being stepped up, with Israeli banks suspending dealings with the Palestinians and the international community refusing to transfer aid until Hamas meets three conditions set immediately after its election victory in January: recognition of Israel, acceptance of previous Israeli-Palestinian agreements and cessation of violence. The upshot is that Hamas does not have money to pay P.A. salaries for April. Hamas leaders are said to be concerned about a possible rebellion that could sweep them from power. More than half of the 140,000 P.A. officials are from the rival Fatah organization, and Hamas leaders apparently fear that they might rebel if not paid soon. According to Israeli analysts, the thinking behind the tough policy is that if the Hamas government resigns or is overthrown, a more pragmatic leadership will emerge. If Hamas bends under pressure, it will itself have become a more pragmatic leadership. And if it remains in power without meeting the international community’s conditions, Olmert’s plan to set Israel’s borders unilaterally will get wall-to-wall international support. So far the international community is staunchly behind Israel. The United States and European Union refuse to have anything to do with Hamas, which they regard as a terrorist organization. In line with this approach, France recently refused visas to two Hamas officials invited to observe the European Parliament in session in Strasbourg. Israeli analysts are convinced the pressure is beginning to tell. According to the IDF, Hamas is on the verge of taking action to stop the firing of Kassam rockets into Israel. In discreet messages to Israel, Hamas leaders have said they would guarantee quiet on their side if Israel suspends its military attacks. Hamas also is under pressure from the Palestinian street, with mounting calls for it to accept conditions for re-engagement with Israel and the international community. Hamas’ response has been to make moderate-sounding statements, without actually recognizing Israel or accepting previous Israeli-Palestinian agreements. In some cases, Hamas double-talk has actually made things worse. For example, P.A. Foreign Minister Mahmoud Zahar wrote a letter to U.N. Secretary General Kofi Annan, implying Hamas’ readiness to accept a two-state solution to the Israeli-Palestinian conflict. But the language didn’t quite say that, and Zahar later denied that was what he had meant. Around the same, while on a tour of Persian Gulf countries, Zahar declared that he longed for the day when he could see a world map without Israel’s name on it. The pressure on the Palestinians has left Hamas virtually unable to govern. It can’t pay salaries, let alone take socioeconomic initiatives or even guarantee food and medical supplies. But so far Hamas leaders are putting on a brave face. “We will not bow to international blackmail,” a defiant Hamas spokesman declared Monday. The question is how long Hamas will be able to continue in this vein. Writing in Ha’aretz, Danny Rubinstein, a leading commentator on Palestinian affairs, predicted the Hamas government’s early demise: “It is still too early to say whether the Hamas government… is about to fall. But judging by its performance so far, it can’t be expected to last long.” For now, Israel seems to be in the driving seat. But its tough policy could backfire if economic sanctions result in a major humanitarian disaster on the Palestinian side, or if Israeli military actions cause heavy civilian casualties. In either case, Israel would lose international support. The pressure also could trigger a new round of all-out Palestinian violence. Already, rogue Fatah militias are calling on Hamas to commit its military wing to a renewed intifada. The question now is whether Israel’s tough policies will convince Palestinians to step back from the brink or whether they’ll plunge the two sides into another cycle of violence and instability.