The security cabinet voted Wednesday to officially label Hamas-controlled Gaza as an enemy entity, a viewpoint shared by the Bush administration, according to U.S. Secretary of State Condoleezza Rice.

The decision allows Israel to respond to Kassam rocket attacks by cutting fuel and power supplies, but ministers voted not to cut off water to the region.

Defense Minister Ehud Barak told reporters the move is designed to pressure terrorists into ending their constant rocket attacks on Jewish communities in the western Negev.

The plan involves several stages. The first step will be to cut off electricity to Gaza when terrorists launch a Kassam attack from the area.  Electricity is used to power the workshops where the rockets are manufactured.

If the attacks continue, the response moves to stage 2, in which fuel supplies are cut. There are exceptions to this measure: the ministers voted to continue to supply fuel to run generators at Gaza hospitals.

The crossing into Gaza will also be affected. Security officials said only food and medical supplies will be allowed to pass into the region. Gaza will be sealed off; no one will be allowed in or out.

Hamas officials slammed the decision, calling it a “declaration of war.” Spokesman Fawzi Barhoum also accused Israel of planning a “humanitarian disaster.”

Palestinian Authority (PA) Chairman Mahmoud Abbas was also the recipient of harsh criticism, with Barhoum accusing him of “silence and cooperation…..with the enemy’s decisions.”  Abbas, meanwhile, called the decision “oppressive.”

Secretary Rice, who met Wednesday in Jerusalem with Foreign Minister Tzipi Livni, assured the PA that the U.S. would not abandon "the innocent Palestinians in Gaza." But Rice also said that America views Hamas as a terrorist group and is “troubled by its actions in Gaza,” adding that Gaza under Hamas rule "is a hostile entity to us as well." 

Foreign Minister Livni told reporters that PA residents “need to understand that Israeli security is in their interest as well.”