US may lift sanctions as panic hits Gaza

Embattled Mahmoud Abbas got a major boost in his increasingly bellicose showdown with Hamas tonight, with a US diplomat saying he expects a crippling 15-month-old foreign aid embargo to be lifted once the Palestinian president appoints an emergency government without the Islamic militants.

The new Cabinet, to be headed by internationally respected economist Salam Fayyad, is to be sworn tomorrow, just three days after Hamas seized control of Gaza and Abbas dismantled the Hamas-Fatah coalition government in response.