Palestinian President Mahmoud Abbas has sworn in a new emergency government that excludes his Islamist rivals, Hamas, who have seized control of Gaza.

Mr Abbas also issued decrees enabling new Prime Minister Salam Fayyad to rule without parliamentary approval and outlawing all of Hamas's armed forces.

Mr Fayyad's predecessor, Ismail Haniya, has said the new government is illegal.

Israel's government said a non-Hamas administration would create a fresh opportunity for a partnership in peace.

The US has also said there will be no obstacles to re-engaging with the new Palestinian government.

But Israeli officials have called for steps to isolate Gaza, which they say will be considered a "terrorist entity".

Israel fuel company Dor Alon cut off all fuel supplies to the Strip except those to the electricity generating plant, in a move which it said was coordinated with the Israeli military.

Reports say the move could lead to severe shortages of petrol and cooking gas within days, unless it is reversed.

Gaza's 1.3 million residents are already facing shortages of food and other essential supplies, although Israel says it has no objection to letting through humanitarian aid.

Meanwhile, Israeli Deputy Defense Minister Ephraim Sneh was quoted by Israeli radio as saying that Israeli troops had been positioned in northern Gaza near the border.

'Dishonorable events'

The new government took the oath of office before Mr Abbas, the leader of Fatah, in the presidential compound in the West Bank city of Ramallah.

Mr Fayyad, an independent who served as finance minister in the previous administration, pledged to protect the interests of the Palestinian people.

"I swear by God that I will be faithful to the homeland and its sanctities, to the people and its national heritage, to respect the constitution and the law, and to fully protect the interests of the Palestinian people," he said.

The former World Bank official is well respected by the international community for his past efforts in combating corruption and promoting transparency.

After the ceremony, Mr Fayyad called for unity within the Palestinian Territories.

"We insist on organic unity, both administrative and political, of the two parts of the homeland - the Gaza Strip and the West Bank," he said.

He also said his cabinet would work to "put an end to the anomaly of the dishonorable events", referring to Hamas taking control of Gaza.

Mr Abbas sacked Mr Haniya, a Hamas leader, on Thursday after factional fighting left more than 100 people dead in Gaza.

Shortly afterwards, the Hamas movement said it had taken over full control of the territory, as its gunmen ransacked Fatah offices and arrested or killed its fighters.

Hamas 'militias' banned

As the power struggle continued, Mr Abbas announced a series of emergency measures to reassert his authority.

The first decree allowed him to swear in the new cabinet and gave it the power to make decisions without the approval of parliament, in which Hamas has a majority.

A second decree outlawed a Hamas paramilitary force, the Executive Force, and other "militias" linked to the group.

"The Executive Force and Hamas militias are declared outside the law for having carried out an armed rebellion against Palestinian legitimacy and its institutions," it said.

"Anyone whose ties with these groups are proven will be punished in accordance with the laws under the state of emergency."

A spokesman for the Islamist movement said the president was "involved in the US-Israeli conspiracy, along with some Arab parties, to bring down the Hamas movement".

"Hamas as a movement has ties and roots to the hearts of the Palestinians, and the resistance will continue and cannot be stopped," Sami Abu Zuhri told the Associated Press.

PHOTO CAPTION

Salam Fayyad (R) is sworm in as prime minister by Palestinian President Mahmoud Abbas