Bush has just as much right to tell Palestinian President Mahmoud Abbas not to form a coalition government with members of Hamas by giving up a few cabinet posts, as he would if he had told German Chancellor Merkel that she shouldn't form a coalition government with her opposition party.
The proper diplomatic response by Abbas to such intrusive behavior is something like,
"The Palestinian people have spoken, and although they have given my party the victory, they haven't given us a mandate to rule. We will always seek peace for our people, but we must also follow the Palestinian people's mandate to work together and form a united, democratic Palestinian government. During this difficult time, we ask our neighbors to give us the opportunity to seek a reasonable compromise and, at the end of it, we hope to present the Palestinian people with a government they can all be proud of."
Of course, "mind your own business" might be more appropriate.
Hey, mister Bush... do want to strengthen the terrorists, polarize the radicals, and discredit representative democracy throughout the entire Middle East?! Fine then. Keep it up!
UPDATE!: Looks like Hamas actually won the election in a surprise upset, this after several news sources were saying that Abbas' Fatah party won a narrow victory. It was a close race, but it appears that Bush helped put Hamas over the top. ;-)
Hamas in charge of Palestine? Israel is gonna be pissed! On the plus side, maybe they'll cut Iran a bit of a break for the time being. It's harder to get a good, frothing hate worked up at several countries at the same time...
Welcome to the Palestinian elections. No guns, no cigarettes, no cellphones.