Both Israelis and Palestinians are reacting with shock to the landslide victory by the Islamic Militant group Hamas in Wednesday's Palestinian legislative elections.Israeli officials say they will have nothing to do with a Palestinian government that includes Hamas, which has called for Israel's destruction.

Hamas leader Ismail Haniyeh salutes supporters outside his house at the al-Shati refugee camp in Gaza

The headline in the Jerusalem Post newspaper on Friday said, "the Palestinian people voted for resistance." Commentators in Israeli newspapers were universally negative about the election results, which saw Hamas sweep a majority of seats in the Palestinian parliament. Many echoed the editor of the mass circulation daily Ma'ariv who wrote that "a prolonged twilight can now be expected."

Commentators on the left blamed successive Israeli governments for, in their words, turning their backs on pragmatic Palestinians who wanted Israeli partners to negotiate with. Commentators on the right warned that Israel should never have made territorial concessions like the Gaza Strip pullout, which they say was exploited by Hamas for political gains.

While Israeli politicians were more subdued in their comments, they too were universally negative. Acting Prime Minister Ehud Olmert said the world and Israel would ignore a Hamas government and make it irrelevant.

In a brief encounter with reporters, elder statesman Shimon Peres summed up the feelings of Israel's political establishment. "We shall not change our position," he said, "but if Hamas does not want negotiations and wants to continue with terrorist activities, I do not think that they will have any support from outside or from Israel.

For their part, Palestinians too appeared to be shocked by the magnitude of the Hamas victory. Palestinian newspapers universally described the election as a "political earthquake."

Palestinian journalist Khalil Assali reported from just outside Jerusalem's al-Aqsa mosque on Friday, saying Palestinians are trying to come to terms with a new political reality. "The mood in East Jerusalem is the same as in the West Bank and the Gaza Strip," said Assali. "People are simply in shock, because they never expected that Hamas would win this kind of a majority. They are also shocked at how Fatah was almost totally destroyed in this election."

Despite concerns and differences, any new Palestinian government will have to try and deal with Israel.

Palestinians for the most part share the same power and water services that Israelis use, and Israel collects millions of dollars every month from the Palestinian Authority in taxes for such services.

Israel is also scheduled to transfer customs revenue to the Palestinian Authority that it collects on behalf of Palestinians. On Friday a senior Israeli finance official voiced concerns about how to transfer funds to any future government that calls for Israel's destruction. Palestinian officials say if they do not receive the funds soon they will not be able to pay an estimated 135-thousand Palestinian civil servants. And that, one Palestinian official warned, would be a recipe for violence.