Mozilla has decided to stop development of a version of its Firefox mobile Web browser for phones running Windows Mobile.

Microsoft has closed the door to native applications on smartphones running its new Windows Phone 7 Series software, Stuart Parmenter, director of Mobile Engineering at Mozilla Corporation, wrote in a blog post on Monday.

Mozilla was preparing to develop a version of Firefox for Windows Mobile, and the development work Mozilla has done on Windows CE 6 has left it “well positioned to have an awesome browser on Windows Phone 7,” according to Parmenter.

But the absence of a software development kit for native applications has made it impossible for Mozilla to move forward, he said.

Microsoft will only support development of applications running in the Silverlight runtime environment, or of games in the XNA Game Studio runtime environment, it announced last week at its Mix conference. It will not allow third party app developers direct access to the phone’s hardware, where they might be better able to exploit its potential.

Still, Parmenter hopes that Microsoft provide Mozilla with a way to build Firefox for Windows Phone 7 Series. Mozilla thinks Windows Phone 7 looks interesting and has the potential to do well in the market, according to Parmenter.

Firefox for Android is still only a pre-alpha version, which means it is still in the early stages of development, according to Mozilla. The pre-alpha version has been optimized for Motorola’s Droid and Google’s Nexus One.