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Source: First Haniyeh Government

The Palestinian Authority Government of March 2006, also known as the First Haniyeh Government, was a government of the Palestinian National Authority (PA), led by Ismail Haniyeh, that was sworn in on 29 March 2006 and was followed by the Palestinian unity government of 17 March 2007. On 25 January 2006, Hamas won the election for the Palestinian Legislative Council (PLC) with 44.4% of the vote vs Fatah's 41.4%, and its leader Haniyeh formed the government, which comprised mostly Hamas members as well as four independents, after Fatah and other factions had refused to form a government with Hamas. It was the first Hamas-led PA government in the Palestinian territories.
Due to the inability of Hamas and Fatah to form a single government, conflict and fighting between Fatah and Hamas followed the election, resulting in Hamas completely taking over governance in Gaza in June 2007 after the Fatah–Hamas conflict. This leads to confusion about who is the legitimate "Palestinian Authority." Fatah gained control of the West Bank in 2007, and is generally referred to as the PA or "Palestinian Authority" while Hamas is more often called the "Palestinian Authority Government."
Hamas has sworn to destroy Israel and is considered by the main donor countries to the PA to be a terrorist organization. The Quartet on the Middle East — comprising the United Nations, the United States, the European Union, and Russia — had said that its members would not deal with the Hamas government unless Hamas recognized Israel's right to exist, forswears violence and accepts the validity of previous Palestinian-Israeli agreements, including the Oslo Accords. Hamas rejected these conditions and a substantial part of the international community, especially Israel and the United States, refused to deal with the Hamas government, suspended aid to the Hamas-dominated PA government and imposed sanctions. On the swearing in of the Hamas government, Israel also withheld taxes collected on behalf of the PA, which would last for 12 months. In an attempt to deflect Israeli and international argument that the government was dominated by a terrorist organisation, in April 2006 Hamas ministers resigned membership in Hamas. To forestall a worsening humanitarian crisis and the collapse of the PA, the EU proposed the setting up of a "temporary international mechanism" (TIM) to channel international funds to the Palestinians through the Palestinian president, bypassing the Hamas-led government. TIM was accepted by the Quartet and the United States on 17 June 2006.
Following the abduction of Gilad Shalit on 25 June 2006 by Gaza-based Palestinian militants, Israel detained nearly a third of the PLC members and ministers, all officials or supporters of Hamas.