A framework was recently introduced to generalize black hole mechanics by r
eplacing stationary event horizons with isolated horizons. That framework i
s significantly extended. The extension is nontrivial in that not only do t
he boundary conditions now allow the horizon to be distorted and rotating,
but also the subsequent analysis is based on several new ingredients. Speci
fically, although the overall strategy is closely related to that in the pr
evious work, the dynamical variables, the action principle and the Hamilton
ian framework are all quite different. More importantly, in the nonrotating
case, the first law is shown to arise as a necessary nod sufficient condit
ion for the existence of a consistent Hamiltonian evolution. Somewhat surpr
isingly, this consistency condition in turn leads to new predictions even f
or static black holes. To complement the previous work, the entire discussi
on is presented in terms of tetrads and associated (real) Lorentz connectio
ns.