  A framework was recently introduced to generalize black hole mechanics by
replacing stationary event horizons with isolated horizons. That framework is
significantly extended. The extension is non-trivial in that not only do the
boundary conditions now allow the horizon to be distorted and rotating, but
also the subsequent analysis is based on several new ingredients. Specifically,
although the overall strategy is closely related to that in the previous work,
the dynamical variables, the action principle and the Hamiltonian framework are
all quite different. More importantly, in the non-rotating case, the first law
is shown to arise as a necessary and sufficient condition for the existence of
a consistent Hamiltonian evolution. Somewhat surprisingly, this consistency
condition in turn leads to new predictions even for static black holes. To
complement the previous work, the entire discussion is presented in terms of
tetrads and associated (real) Lorentz connections.
