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Foreign Affairs Minister John Baird says money which would have gone to the Commonwealth Secretariat will be allocated to other programs.Sean Kilpatrick/The Canadian Press

Israel's rationale for suspending peace talks with the Palestinian leadership is "understandable," Foreign Affairs Minister John Baird said, flagging that a recent Palestinian unity pact means the militant Islamist movement Hamas would now be at the table.

Speaking to reporters on a conference call from Latvia, where he met with his counterpart to discuss the "deteriorating" situation in Ukraine, Mr. Baird addressed news out of Israel on Thursday that it won't negotiate with a Palestinian government backed by "Hamas terrorists." The Middle Eastern nation called on Palestinian Authority president Mahmoud Abbas to abort his recently announced unity pact with Hamas, which has ruled over the Gaza Strip since deadly clashes between the two Palestinian factions erupted in 2007.

"Israel feels it is tremendously problematic to have peace negotiations with a group that now may include people who believe in the destruction of the state of Israel and have supported terrorist attacks against the civilian populations," Mr. Baird said. "And that's understandable."

U.S. legislators have called for an immediate suspension of U.S. aid to the Palestinian Authority, as required under a 2006 law that prohibits support for a "Hamas-controlled Palestinian Authority."

Asked about the future of Canadian aid, which was thrown into question when Ottawa vocally opposed the 2012 Palestinian bid for observer-state status at the United Nations, Mr. Baird said Canada will "wait to get all the facts before we come to a conclusion."

"Hamas is a listed terrorist organization in Canada, and we feel strongly that that requires us to take certain action," he said. "But let's take it one step at a time."

Ottawa provided a $300-million aid package to Palestinians between 2008 and 2013, or roughly $60-million per year. That money ran out in April 2013, but no new broad multi-year package replaced it.

Prime Minister Stephen Harper's government has instead parcelled out pledges in waves: $30-million committed last year, and another $66-million, to be spread over three to five years. Mr. Harper announced the latter package during a January visit to the West Bank, which the Palestinian Authority controls.

Mr. Baird has spent the past week in Eastern and Central Europe, visiting the Czech Republic, Slovakia, Poland and Latvia. He said the situation in Ukraine and, specifically, Russia's "aggressive and unacceptable behaviour" featured most prominently on his agenda.

"If I portrayed one message this week, it's that Canada stands with our NATO allies in the face of such aggressive acts," he said, one day after Russia began military drills along the Ukrainian border. "I think it's important that our allies are assured that we take our NATO obligations very seriously."

Mr. Baird noted Canada's recent announcement that it will deploy six CF-18 fighter jets to help NATO allies in Europe as the crisis deepens in eastern Ukraine, where Russia-backed separatists are agitating for independence. He also threatened further action against Moscow if it doesn't de-escalate tensions.

"The Russian Federation should know that we stand ready to strengthen our sanctions regime and isolate them further at a moment's notice," he said, alluding to sanctions imposed earlier several weeks ago on a number of Russian officials.

Mr. Baird's European trip also included a visit to the Auschwitz-Birkenau Nazi death camp, which served as a stark reminder of a "deeply troubling" chapter in history.

"Touring Auschwitz-Birkenau was obviously a tremendously painful reminder of the power of hate and the lack of respect for humanity," he said. "It certainly does strengthen the resolve to push for pluralism and respect among people of different backgrounds."

Mr. Baird's European trip continues Monday, with bilateral talks with Estonia's president and a meeting with his counterpart, Foreign Affairs Minister Urmas Paet.

With files from Patrick Martin