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Israel declares Gaza Strip hostile entity -

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Reporter: David Hardaker

TONY EASTLEY: Israel has stepped up the pressure on the militant Hamas organisation with a decision
to declare the Gaza Strip a "hostile entity".

The decision means Israel could cut power or fuel supplies to the Gaza Strip's one and a half
million residents in retaliation for any militant attacks on Israel.

Israel says it's not acting in breach of international laws, which make collective punishment
illegal. But the move has been condemned by the UN Secretary General.

Middle East Correspondent, David Hardaker reports.

DAVID HARDAKER: For close to seven years militants from the Gaza Strip have been firing rockets
into Israel. The residents of the border town of Sderot have borne the brunt of the attacks, but a
direct hit which injured dozens of Israeli soldiers last week has spurred Israel's government to
adopt a new form of retaliation.

Israel's security cabinet has now reclassified the Gaza Strip as a hostile entity.

Foreign Minister Tzipi Livni:

TZIPI LIVNI: The meaning is that all the needs which are more than humanitarian needs will not be
supplied by Israel to Gaza Strip.

DAVID HARDAKER: That means Israel could cut electricity and possibly fuel supplies to the Gaza
Strip - not totally but for perhaps an hour for every rocket fired by a militant.

Tzipi Livni:

TZIPI LIVNI: We do hope that the situation in Gaza Strip will change in the future and also the
Palestinians understand that supporting these kind of terrorists are not going to help them.

DAVID HARDAKER: It's a controversial step because it means that all of Gaza's 1.4 million people
will pay for the actions of a few. That amounts to collective punishment - illegal under
international law, but Israel believes it's found a way around that.

By declaring Gaza hostile, Israel could argue it's no longer bound by international laws which
govern the administration of occupied territory. However, under international law, Israel remains
legally responsible for Gaza because it still controls its borders, its airspace and its
territorial waters.

SAEB EREKAT: I think this is illegal and this is null and void.

DAVID HARDAKER: Palestinian Chief Negotiator Saeb Erekat is from the Fatah movement and no friend
of Hamas. He says there's nothing legal about Israel's move at all.

SAEB EREKAT: Gaza is not an independent state. Gaza is under occupation and I think this is a
decision of total violations of international law and it's a collective punishment and preparation
for further military escalations against 1.5 million people who live in Gaza.

DAVID HARDAKER: The idea of cutting electricity or fuel was first proposed by right wing Israeli
politicians but was initially rejected by Israel's Prime Minister Ehud Olmert as well as more
moderate figures in the Government, and not only because of legal questions.

The Government's been concerned about international reaction and there's also been doubts about the
strategy itself.

Opponents of the move believe it plays into the hands of the Islamist Hamas movement because, they
say, the more hardship there is, the more powerful Hamas becomes.

Gaza's economy has already been severely hit by international sanctions and the closure of
crossings.

CHRIS GUNNESS: We still hope that Israel will refrain from implementing this decision which clearly
is not in the interests of the people of Gaza.

DAVID HARDAKER: Chris Gunness is a spokesman for the United Nations Relief and Works Agency which
caters to the needs of almost a million people in Gaza.

CHRIS GUNNESS: We are concerned that if you look at the present situation, it's hard to avoid the
conclusion that the humanitarian situation is grim indeed, and these measures if implemented will
make the situation in Gaza, one fears, considerably worse.

As I say, we hope that Israel will see the sense of not implementing this decision.

DAVID HARDAKER: Israel's decision came as US Secretary of State Condoleezza Rice was visiting
Israel for talks leading up to a planned Middle East peace conference later this year.

CONDOLEEZZA RICE: Hamas is indeed a hostile entity. It's a hostile entity to the United States as
well.

DAVID HARDAKER: Despite the questions about the legality of Israel's move, Dr Rice gave it her
backing.

CONDOLEEZZA RICE: We have been very concerned that two things be understood: one is that we will
not abandon the innocent Palestinians; and secondly that Gaza and the West Bank are both
constituent entities of the to be Palestinian state.

TONY EASTLEY: The US Secretary of State Condoleezza Rice ending David Hardaker's report.