Interim Prime Minister Ehud Olmert ordered the revocation following the suicide bombing in Tel Aviv Monday, which Hamas – now ruling the PA – defended as a legitimate act in the struggle against Israel.

The loss of Jerusalem residency means the Hamas officials will no longer receive money from Israel’s National Insurance (Bituach Leumi) and will not be afforded the freedom of movement throughout all of Israel accorded those Arabs holding Jerusalem residency cards. Jerusalem's Arabs enjoy the unique ability to travel freely to all areas of the greater Land of Israel.

Foreign Minister Tzippy Livni told reporters that the move was her idea. This is the first time Jerusalem residency has been revoked for punitive reasons. Livni also urged Olmert, though, to refrain from classifying the Hamas-led PA as an “enemy” entity, but rather a “hostile” one.

Army Radio reported Thursday that the government is considering expanding the policy to include other known Hamas members and PA employees living in Jerusalem.

The Hamas parliament members are reportedly considering bringing the case to Israel’s Supreme Court, which has in the past been sympathetic to Arab wishes to retain Israeli citizenship.

Israel’s Attorney General Menachem Mazuz, however, said that the revocation of Jerusalem residency and even Israeli citizenship was legal under what he called “extreme circumstances,” and will be defended if brought to the court.

The Justice Ministry has said the government has a legal case but stopped short of recommending the sanctions. The Israeli television program, Mabat, pointed out that the courts might ask the government to explain how it can define the three as terrorists and strip them of residency, while choosing not to arrest them when they had the chance.

The Yisrael Beiteinu Party, which received 11 seats in last month’s elections, ran on a platform calling for stripping large numbers of Israeli Arabs of their citizenship.

PA Justice Minister Ahmed Khalidi said the PA would fight on behalf of the Hamas officials due to the concern that Israel is establishing a precedent that can be used to strip more Jerusalem Arabs of their residency status.

Tzvi Ben Gedalyahu contributed to this report.