Dujarric, UN chief Kofi Annan's spokesman, said the UN was making sure that humanitarian aid and services are delivered to the Palestinian people.

"Working contacts on humanitarian issues will go on," he stressed.

But the Palestinian government lashed out at the UN move.

The new policy is "a bad decision that defies all logic, knowing that the United Nations is an international organisation which should not be using the same criteria followed by the United States and European Union," said Palestinian government spokesman Ghazi Hamad.

Dujarric dodged a question on whether the new guidelines amounted to a downgrading of the world body's contacts with the Palestinian government, but said the policy had been evolving since the Islamist party's January 25 landslide election victory.

"There has been a lot of confusion among UN officials on the ground" about what kind of contacts they can have with the new Palestinian government, Dujarric said.

Palestinian UN envoy Ryad Mansour said he was not aware of the new policy, but recalled Annan's earlier comments that the election outcome "should be respected" and that "the Palestinian people should not be punished".

Dujarric said Annan, currently in the Netherlands, had been working the phone with the United States, the European Union and Russia to try to set up a Middle East Quartet meeting to work out a joint policy on Hamas.

Hamas, behind dozens of suicide bombings in the course of a five-year uprising, has rejected the roadmap peace plan drawn up by the Quartet, which targets a two-state solution to the Israeli-Palestinian conflict.

But last week Palestinian Foreign Minister Mahmud al-Zahar sent a conciliatory letter to Annan stating that his new Islamist government was looking for peace and independence side-by-side with its neighbours while not specifically mentioning Israel.

Russia said Monday that Annan had proposed that the Quartet meet in New York at the end of April or the beginning of May.

Dujarric's comments Tuesday also came against a backdrop of escalating Israeli military pressure on the Palestinians which Ismail Haniya, prime minister of the new Hamas-led government, said aimed to bring the Palestinian people to their knees.

Sixteen Palestinians, including two children, have been killed since the weekend in airstrikes and shelling, with the Israeli government vowing no let-up until Palestinian militants stop firing rockets across the border.

The Israeli cabinet has also reaffirmed a determination to sever all contacts between Israel and the Hamas-led
Palestinian Authority.

In addition, Israel plans to boycott any foreign diplomat who chooses to meet with Hamas officials.

The Jewish state -- which, like the EU and Washington, regards Hamas as a terrorist organization -- has also stopped handing over customs duties that it traditionally collects on behalf of the Palestinian Authority, worth around 50 million dollars a month.

On Monday, EU foreign ministers formally backed plans for a temporary aid suspension to the Palestinian government while pledging their support for the Palestinian people.

The decision sparked a protest in Gaza City, and the Arab League has condemned the move as "reprehensible."

The EU gives about 500 million euros (600 million dollars) a year to the Palestinian Authority, about half of it collectively through Brussels and the rest from individual EU governments.

On Tuesday, Russia argued that denying aid to the Palestinians because of Hamas's participation in the government was a mistake.

"We are convinced that refusing help to the Palestinians due to the election of Hamas and the formation of a government from members of the movement is a mistake," Foreign Minister Sergei Lavrov said, quoted by the RIA-Novosti news agency.

In a later interview with Israeli public radio, Livni, also the justice minister, said a distinction should be made between Palestinians who attack soldiers and those who target civilians.

"We must say to the international community that terrorists who take the lives of civilians are terrorists, that you cannot justify their motivations," she said.

Experts believe that the Palestinian resistance movement Hamas, now in government after a landslide election victory, has changed resistance tactics, targeting only Israeli military targets within the territories occupied in 1967.

Intensifying Shelling

On the ground, Israeli Defense Minister Shaul Mofaz said Tuesday his forces would intensify its bombardments of Gaza despite the recent deaths of two Palestinian children.

"Our operations are going to intensify," he vowed.

Sixteen Palestinians have been killed since Friday night, April 6, by Israeli strikes and tank shelling.

The latest victim was eight-year-old girl Hadil Ghaber who died on Monday, April 10, when an Israeli shell struck a house in Beit Lahiya.

A seven-year-old boy was also killed in an air strike on Friday.

The head of the United Nations agency for Palestinian refugees mission in Gaza, John Ging, expressed "great concern" over the situation after visiting UN-run schools which he feared could end up in the firing line.

"My reaction is to have an expression of very great concern. It is not at all acceptable that innocent lives are lost. I went to the schools (in Beit Hanun and Beit Lahiya) to see for myself the danger that the children are in from this shelling," he said.

Israel withdrew all its ground troops from the Gaza Strip last September and its bombardments of the territory have been either from the air or by tank shelling from across the border.

Livni acknowledged that such tactics could have tragic consequences as they target innocent civilians.

A unique and unprecedented 120-strong group of Israeli and Palestinian ex-fighters was launched Monday to campaign both against occupation and against violence as a means of achieving peace.

The number of Israeli reservists who refuse to do their military service in the occupied Palestinian territories is on the rise.

Twenty-seven reserve and active duty airmen signed a letter in September 2003, refusing to carry out "immoral and illegal" raids on Palestinian civilians in the West Bank and Gaza Strip.

In November 2003, four former heads of the Israeli Shin Beth interior security services warned of the "disastrous" consequences of Israel's continued occupation of the Palestinian territories.

Strangling Palestinians

Palestinian Prime Minister Ismail Haniya said the continued bombardment is designed to bring the Palestinian people to their knees.

"The bombardments in the north of the Gaza Strip and in (southern) Khan Yunis ... are part of a political and economic siege of the Palestinian people," he told the weekly cabinet meeting.

"This is an attempt to bring the Palestinian people to their knees and strangle the government which was democratically elected."

Haniya also blasted a decision by the EU decision on Monday to suspend aid payments to his government, which follows a similar move by Washington last week.

"We can see that this decision as a green light for Israel to continue its aggressions and as a collective punishment on the Palestinian people over its democratic choice."

"Terrorist actions are contradictory to the teachings and value of Islam," he told diplomats, government officials, academics and business executives.

"The kingdom has strongly expressed its determination to continue to exert all possible efforts in combating terrorism and whoever helps in financing or inciting terrorism.

"Terrorism... is a disease that threatens the whole world and our two friendly countries have agreed on the importance of fighting terrorism and terrorists."

Prince Abdul Aziz said that in his meeting with Prime Minister Lee Hsien Loong on Monday both agreed that relevant agencies in their respective governments should strengthen cooperation against terrorism.

Saudi Arabia has been battling a wave of terror by suspected Al-Qaeda militants since May 2003.

On February 24 it announced that it had thwarted a bid to blow up an oil processing plant, the world's largest, at Abqaiq in the oil-rich Eastern Province.

Security forces killed would-be suicide-bombers in two vehicles laden with explosives before they could penetrate the massive complex.

Singapore is a staunch US ally in Southeast Asia in the fight against militant groups blamed for a series of bloody bombings in the region.

Saudi Arabia, the world's top oil producer with more than a quarter of global reserves, currently pumps around 9.5 million bpd and has a capacity of 11.3 million bpd.

The crown prince, who is on a visit to the city-state, was speaking to diplomats, academics, business executives and government officials at a public lecture organized by the Institute of Southeast Asian Studies.

His speech came amid a surge in oil prices to near record highs Tuesday.

Analysts said the market was rattled by media reports during the weekend that the United States may launch military strikes against nuclear facilities of major oil producer
Iran.

At 8:10 pm (1210 GMT), New York's light sweet crude for delivery in May was at 69.28 dollars a barrel, up 54 cents from its close of 68.74 dollars a barrel in the United States on Monday.

The all-time high for the benchmark futures contract was 70.85 dollars a barrel reached on August 30, 2005 after Hurricane Katrina savaged oil-producing facilities in the Gulf of Mexico region in the southern United States.

Another benchmark, Brent North Sea crude oil, reached an all-time high point of 69.70 dollars per barrel Tuesday.

Washington and its allies believe Iran is secretly trying to build a nuclear bomb, but Tehran has said its nuclear research was for peaceful purposes.

Traders ignored efforts by US President George W. Bush to play down the reports of a possible military strike.

But the relationship with Riyadh is also important to Beijing "for geopolitical reasons, given Saudi Arabia's weight in Arab, Gulf and Islamic circles", he told AFP.

Saudi Arabia in turn "needs the Chinese in a number of ways", chiefly as a market for its oil and a partner in energy and petrochemical ventures but also as a technology supplier, he said.

Both the Saudi government and private sector need to diversify the oil-based economy "and Chinese companies will be more than welcome to come here and help them do that", Bu Hulaiga said.

Hu, accompanied by the foreign affairs and commerce ministers and energy officials, will visit Riyadh and the eastern cities of Dammam and Dhahran, the kingdom's oil hub, a Chinese embassy spokesman said.

The Chinese foreign ministry said energy issues will be an important component of Hu's trip to Saudi Arabia and later Africa, but are "not the only domain" of cooperation.

King Abdullah oversaw the signing of five economic deals, including an energy agreement, during a landmark visit to China in January, the first by a Saudi monarch since diplomatic relations were established in 1990.

He went on to visit India, Malaysia and Pakistan. Crown Prince Sultan bin Abdul Aziz meanwhile was in Singapore Tuesday on the second leg of a tour which started in Japan.

Bandar al-Aiban, who chairs the foreign affairs committee of the appointed Shura (consultative) Council, attributed Saudi Arabia's drive to strike partnerships with Asian giants to several factors.

Asian countries are "an expanding market for Saudi oil and petrochemical products", he said.

Moreover, Riyadh is undergoing an economic growth comparable to what some of the Asian nations experienced and opening up its economy following its accession to the World Trade Organization, Aiban told AFP.

Saudi Arabia also hosts millions of Asian workers, "and it is normal that it should forge good relations with their home countries", he said.

But Saudi Arabia's growing Asian links should not be seen as a bid to spite traditional Western allies, who themselves are increasingly engaging with Asian powers, Aiban added.

A Western diplomat agreed it was only "normal" that a major economy such as Saudi Arabia, the world's top oil exporter, should "seek relations with other important economies".

But Bu Hulaiga said it had taken Japan "a very long time to figure that they have to establish a strategic relationship" with Riyadh, Tokyo's biggest oil supplier.

The Japanese "are interested in human resources development in Saudi Arabia, which is the biggest challenge this country faces", Bu Hulaiga said.

Prince Sultan said in Tokyo last week that Riyadh would pay for students to study in Japan, where only about 30 Saudi students are now known to be studying.

The kingdom shipped over 20 million tons of oil to China last year, amounting to 17 percent of Beijing's total crude imports.

China's Sinopec is drilling for gas in the Saudi desert and building a refinery with state oil firm Saudi Aramco in the Chinese province of Fujian. Another joint refinery venture is planned in Qingdao city.

The Chinese president is due to give a speech at the Shura Council, becoming only the second foreign leader to do so after French President Jacques Chirac, who addressed the advisory body in March.