Gaza City, Gaza Strip ? Palestinians installed a new, more moderate coalition government on Saturday, in hopes of persuading the international community to end its isolation of the Palestinian Authority and lift a year of bruising sanctions.

Israel promptly announced it would not deal with the coalition, because governing partners Hamas and Fatah stopped short of explicitly recognizing the Jewish state or renouncing violence, as the international community has demanded.

But the new alliance, which replaced the militantly anti-Israel government led by the Islamic Hamas, appeared to implicitly recognize Israel by calling for a Palestinian state on lands the Israelis captured in 1967. Norway immediately recognized the new coalition, while other countries and the U.N. signaled flexibility – suggesting money could start flowing again if the coalition keeps anti-Israel activities in check.

The U.S., traditionally a major donor, remained cool to the coalition plan.

“It remains our view that any Palestinian government must renounce violence, recognize Israel and respect previous agreements and obligations between the parties,” said Nancy Beck, a State Department spokeswoman. “These are foundation principles upon which any Palestinian state must be based. A Palestinian state will not be born from terror.”

Palestinian lawmakers voted overwhelmingly – 83 to 3 – to approve the government, then leapt to their feet in a standing ovation after the result was announced. Forty-one of the legislature’s 132 members, most of them members of Hamas, are held in Israeli jails and were unable to vote. Palestinian President Mahmoud Abbas of Fatah swore in the new 25-member Cabinet shortly after the parliament vote.