(Adds Al Jazeera statement)

JERUSALEM, March 12 (Reuters) - Israel said on Wednesday it would no longer cooperate with the influential Arabic television station Al Jazeera, accusing it of one-sided reporting that favours the Palestinian militant group Hamas.

Al Jazeera denied any bias in its reporting and said it had received no formal communication from the Israeli government on the decision.

Israeli officials said the government would not grant interviews to the Qatar-based satellite station and could deny visas to its employees due to its coverage of fighting between Israel and militants in the Hamas-controlled Gaza Strip.

"If they represent one side at the expense of another without being objective, why do we have to deal with them? Why do we have to give them services?" Israeli Deputy Foreign Minister Majalli Whbee told Reuters.

Whbee said the Foreign Ministry would lay out its concerns in letters to the station's headquarters and Qatar's government. Al Jazeera also broadcasts in English -- a service that would not be affected by the boycott, an Israeli official said.

Al Jazeera said it was surprised by the announcement on Israel radio.

"Al Jazeera has always endeavoured to cover the news in a fair and balanced and professional manner," Al Jazeera said in a statement sent to Reuters in London.

Walid al-Omari, Al Jazeera's bureau chief in Israel and the Palestinian territories, said the station's reporting was unbiased and showed no sympathy to Hamas or anyone else.

Omari said spokesmen from the Foreign Ministry had not cooperated with Al Jazeera for at least two weeks.

"We invite them to come up and talk, they begin to give all kinds of excuses," Omari told Israel's Army Radio.

An Israeli official accused the Arabic-language station's staff, together with Hamas, of "staging" footage of a January blackout in Gaza after Israel cut fuel supplies in what it said was a response to cross-border rocket salvoes.

The official, who spoke on condition of anonymity, said government representatives had met twice with Al Jazeera staff in recent weeks to discuss their concerns. (Writing by Brenda Gazzar, Editing by Sami Aboudi)

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