Hamas Cabinet is sworn in by Mahmoud Abbas

GAZA CITY, Gaza Strip -- Hamas formally took power Wednesday, and the newly installed prime minister pledged to cooperate with President Mahmoud Abbas, head of the defeated Fatah party.

At a news conference in Gaza after Abbas swore in Ismail Haniyeh and his Cabinet, Haniyeh said his relations with Abbas would stress "cooperation and harmony, based on the supreme interest of the people." Haniyeh said he and Abbas would confront "Israeli aggression against the people" as well as internal chaos.

He called Hamas' assumption of power "a great moment."

The swearing-in ceremony, which came just a day after Israel's national election, ended a two-month transition period of ambiguity since Hamas' election victory in January.

The 24-member Cabinet includes 14 ministers who served time in Israeli prisons.

With a Hamas government installed, the lines of confrontation with Israel were clearly drawn. Hamas insists it will not soften its violent ideology toward the Jewish state.

Israel's presumed prime minister-designate, Ehud Olmert, has countered that if Hamas will not bend, he will set the borders of a Palestinian state by himself and keep large areas of the West Bank.

With Hamas at the helm, the Palestinian Authority also faces a crippling international economic boycott. Canada announced it was suspending assistance to the Palestinian Authority, with Hamas calling the decision hasty and unfair.

"With Hamas taking over now, you can't have business as usual," Israeli Foreign Ministry spokesman Mark Regev said.

Israel suspended tens of millions of dollars in monthly tax transfers to the Palestinian Authority after Hamas' election victory last month, and Regev said the Israeli Cabinet would decide on additional sanctions next week.

Abbas, a moderate, administered the oath to some of the Cabinet ministers in a brief ceremony at Gaza City's parliament building.

With Israel banning the travel of Hamas leaders between the West Bank and Gaza, the remaining ministers held a separate ceremony in the West Bank. The two settings were hooked up by videoconference.

The first to be sworn in was Haniyeh, who walked along a red carpet, then placed his hand on a copy of the Muslim holy book, the Quran, laid out on a low table.

Haniyeh pledged to be "loyal to the homeland and its sacred places."

An expressionless Abbas looked on.