U.S. Secretary of State Condoleezza Rice said Monday that the United States will resume direct aid to the new Palestinian emergency government installed by Palestinian Authority President Mahmoud Abbas.

The United States will "resume full assistance to the Palestinian government and normal government to government contacts," Rice said at a press conference held at the State Department.

The United States will lift the aid embargo imposed on the Palestinian government previously led by the Hamas, Rice said.

"This will enable the American people and American financial institutions to resume normal economic and commercial ties with the Palestinian government," Rice said.

The U.S. decision came after Abbas signed a decree early Sunday to install a new emergency cabinet. The mini cabinet, which is headed by U.S.-educated economist Salam Fayyad and only consists of 10 ministers, was sworn in on Sunday.

The decree also outlawed the armed wing of the paramilitary security branch of the Hamas movement, saying it had carried out a "military coup against the Palestinian legitimacy and its government."

The United States has regarded Hamas as a terrorist group and has cut off all contacts and aid to the Hamas-dominated Palestinian government prior to the emergency cabinet.