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One Hamas campaign poster in the recent Palestinian elections couldn’t have been more pointed: “America and Israel are against Hamas,” it said. “What do you say?”

Palestinian voters had their say: They swept Hamas into office, handing the terrorist group a majority of seats in the new parliament.

On Sunday, a day after the swearing-in of the Hamas-dominated legislature, Israel handed Hamas another victory, albeit inadvertently. Israel froze the transfer of about $50 million a month in tax and customs receipts due the Palestinian Authority. Israel’s leaders argued that since terrorists are now in control of the legislature, it could not hand over the money, which is critical for the Palestinians to meet their payrolls.

That’s a bad move by Israel. The $50 million isn’t foreign aid, a government handout. It’s the Palestinians’ money, collected by Israel.

Holding the money plays into Hamas’ complaints that the Palestinian people are being punished for voting in a free and fair democratic election. If Israel and the U.S. are serious about supporting democracy in Arab countries, then they can’t penalize voters for their choices.

The ascendance of Hamas to power is a confounding and dangerous threat to prospects for peace in the Middle East. The U.S. and its European allies have warned that foreign aid will be cut off if Hamas does not renounce violence, recognize Israel and respect previous agreements. Hamas leaders refuse–so far.

Foreign aid can and should be used to promote the goals of the nations providing it. The U.S. has put more emphasis on giving aid to governments that show progress on human rights, democracy and other ideals. It and other nations would be right to withhold aid if Hamas doesn’t meet international demands.

But in this case, money collected for the Palestinians is being denied to them, and the catalyst for that is the Palestinian people’s vote. This may lead to three results, none of them good.

If thousands of security forces aren’t paid, there could be more chaos in the Palestinian territories. A cash-starved Hamas could be shoved even harder into the arms of Iran’s mullahs and other hard-line regimes. And this may stoke sympathy, particularly from Arab states and some Europeans, toward Hamas.

The Palestinian government hasn’t even been formed yet. Leaders just picked a new prime minister on Monday. The new government has said, essentially, nothing. It has done nothing.

If the new leaders from Hamas do not renounce violence, if they threaten Israel, they will earn the repudiation of the rest of the world. They won’t be able to count on help from Arab nations–those nations have notoriously failed to fulfill financial commitments to the Palestinians. Hamas will learn there is a severe financial and political cost to governing like a terrorist organization. Give them time–a little time–to consider their fate.