Austria ? The European Union on Friday threatened to cut off aid to a Hamas-led Palestinian government “unless it seeks peace by peaceful means” – its strongest signal yet to the new leadership.

The EU foreign ministers reviewed financial aid to Palestinians but announced no immediate halt to funds as long as Hamas has not formed a government.

The EU expects a Hamas-led government to recognize Israel, renounce violence and accept all previous agreements between the Palestinians and Israel.

The decision to hold off on cutting aid was seen as a bid to pressure Hamas, which won the Jan. 25 Palestinian parliamentary elections, to shed its strident anti-Israel views and ensure EU aid continues to ease economic plight of the Palestinian people.

Israel has already halted monthly transfers to the Palestinian Authority of some $50 million in tax receipts following Hamas’ election victory.