Hamas protested "interference" by the United States and Israel after reports Tuesday the nations were exploring ways to topple the militants' incoming government unless they renounced their violent ideology and recognized Israel's right to exist.
In Washington, the White House and the Israeli ambassador to the United States denied such a plot. The State Department said it was reviewing U.S. aid to the Palestinians.
Exiled Hamas leader Khaled Mashaal said in Sudan his group had no plans to recognize Israel.
"There will be no recognition of Israel and there will be no security for the occupation and colonization forces," Mashaal told a rally in Khartoum. "Resistance will remain our strategic option."
The New York Times, citing U.S. and Israeli officials it did not identify, reported Tuesday that the United States and Israel were considering a campaign to starve the Palestinian Authority of cash so Palestinians would grow disillusioned and bring down a Hamas government.
Israeli security officials said they were looking at ways to force Hamas from power and were focusing on an economic squeeze that would prompt Palestinians to clamor for the return of President Mahmoud Abbas' ousted Fatah Party. The officials spoke on condition of anonymity because they were not authorized to discuss the matter with the media.
A Foreign Ministry official said Israel was threatening to dry up funding and isolate the Palestinians internationally to keep Hamas, which is committed to Israel's destruction, from taking power.
However, Israeli Ambassador Daniel Ayalon said: "There are no ongoing discussions with the U.S. designed to bring down the Palestinian government.
"There is no conspiracy between Israel and the United States to hurt the Palestinian people and there is no plan whatsoever to compromise the well-being of the Palestinian people," he said.
A Hamas official protested the reports, saying attempts to bring down a future Hamas government were hypocritical.
"This is . . . a rejection of the democratic process, which the Americans are calling for day and night," incoming legislator Mushir al Masri said. "It's an interference and a collective punishment of our people because they practiced the democratic process in a transparent and honest way."
White House spokesman Scott McClellan said, "There's no plot." State Department spokesman Sean McCormack said he was "puzzled" by the report.
"We are not having conversations with the Israelis that we are not having with others. There is no plan, there is no plot," he said.