Key Western leaders are decidedly unimpressed by today's formalization of a Palestinian reconciliation agreement between the Fatah movement and Hamas.

Former British Prime Minister Tony Blair, who serves as the envoy for the Quartet pushing for a peace agreement between the Palestinians and Israel, told the Associated Press that "there will be no peace" unless Hamas changes course dramatically and agrees to demands that it renounce violence and recognize Israel's right to exist.

Palestinian official Nabil Shaath called those demands "are unfair, unworkable and [they] do not make sense." A Hamas agreement to refrain from violence should be enough, he said.

Under the agreement, a caretaker Palestinian government would rule until new Palestinian elections next year. That government would not include Hamas officials, a move designed to preserve international financial aid.

The Obama administration has taken a wait and see approach about U.S. financial support for the Palestinian Authority. But House Foreign Affairs Committee Chairwoman Ileana Ros-Lehtinen, R-Miami, says U.S. law doesn't allow that. If Hamas is in any way a part of the government, it's illegal to send money or other support to a designated foreign terrorist organization, she told the Washington Post's Jennifer Rubin.

"I don't care if there is one or five or hundreds of members of Hamas; no U.S. funds can go to the PA. Call it what you want," Ros-Lehtinen said. "Be fools if you want. But we will hold the Obama administration's feet to the fire."

Meanwhile, American and British officials blasted Palestinian condemnation of the U.S. operation killing Osama bin Laden. Hamas leader Ismail Haniyeh condemned the death "of an Arab holy warrior," saying it was part "of the American policy based on oppression and the shedding of Muslim and Arab blood."

British Foreign Secretary William Hague said the comments would hurt peace prospects in the Middle East. "It would have been better for Hamas to join the welcome to that," he said. "That would have been a boost in itself to the peace process."

A State Department spokesman called Hamas comments "outrageous."

Bin Laden "was a murderer and terrorist," Mark Toner told reporters Tuesday. "He ordered the killings of thousands of innocent men, women and children... many of whom were Muslim. He did not die a martyr. He died hiding in a mansion, or a compound, far away from the violence that was carried out in his name."

Toner echoed Blair's statements about the demands by the Quartet, which is comprised of the United States, the European Union, Russia and the United Nations.