WASHINGTON, Jan 31: The US government has asked its agencies responsible for monitoring the Middle East to explain why they failed to predict Hamas’s victory in Palestinian elections.

“Certainly I’ve asked why nobody saw it coming,” said Secretary of State Condoleezza Rice while acknowledging that Washington was caught off guard by the election results.

Hamas, which the US regards as a terrorist organisation, won a majority of seats in parliamentary elections on Jan 25.

“I hope that we will take a hard look because it does say something about perhaps not having had a good enough pulse on the Palestinian population,” said Ms Rice.

Earlier on Monday, President George Bush reiterated that the US would not do business with Hamas as long as the party stuck to its position that Israel should not exist, while describing as ‘positive’ the group’s anti-corruption campaign pledges.

To a question whether Washington would continue its financial support to the Palestinian Authority (PA) after the Hamas victory, Ms Rice said the United States was not prepared to fund an organisation that advocates the destruction of Israel and violence.

The US and European Union are of one mind on the question of aiding a Hamas-led government, Ms Rice said. “I think we’re all saying exactly the same thing, that there are choices now confronting Hamas and we will see what they do.”

Palestinians rely on two external sources of income: the Israeli-collected taxes on Palestinian goods and foreign aid, which comes primarily from Europe.

Since the signing of the 1993 Oslo accord, Palestinians have received more than $1.7 billion in US economic assistance — more than any other donor country — very little of it directly to the Palestinian Authority.

The EU gave the Palestinian Authority $612 million last year.