Palestinian lawmakers formally endorsed a new unity cabinet today after Prime Minister Ismail Haniyeh of the Islamist Hamas movement declared that it would uphold the right to "all forms" of resistance.
Palestinians hope the coalition, the first forged between Hamas and its secular Fatah rivals, can end bloody factional violence that has cost more than 300 lives in the past year, and persuade foreign powers to lift crippling financial sanctions.
Underlining the internal tensions, gunmen wounded a Fatah security officer in the Gaza Strip. The pro-Fatah Preventive Security force accused police loyal to Hamas of staging the attack. There was no immediate comment from Hamas.
Eight-three of the 87 members of the Palestinian Legislative Council attending a video-linked session in Gaza and Ramallah voted in favour of the government. Forty-one of the council's 132 members, including 37 from Hamas, are in Israeli jails. Israeli travel restrictions prevented the legislators from meeting in a single venue.
Israel ruled out dealing with the Fatah-Hamas coalition, citing Hamas's refusal to accept demands, set by a Quartet of foreign peace mediators a year ago, that it forswear violence, recognise the Jewish state and accept past interim peace deals.
"We're not going to work with this government," said Israeli Prime Minister Ehud Olmert's spokeswoman Miri Eisin.
"This government does not recognise our existence, it does not recognise the treaties, and most important, does not in any way renounce terror," she said, seizing on Mr Haniyeh's remarks. But with international anxiety mounting over the diplomatic impasse, internal violence and deepening Palestinian poverty, there have been signs of Western flexibility on talking to non-Hamas members of the new cabinet.
"This national unity wedding has received an Arab and international welcome, which we hope will be transformed into practical steps to end the siege," Mr Abbas told lawmakers.
Mr Abbas, who heads the Palestine Liberation Organisation, again endorsed an Arab League offer of full peace with Israel if it quits all the land it occupied in the 1967 Middle East war. Mr Haniyeh, who signed a power-sharing deal with Fatah leader Abbas last month, struck an uncompromising tone. "The government affirms that resistance in all its forms, including popular resistance to occupation, is a legitimate right of the Palestinian people," he said.
The Quartet - the United States, the European Union, Russia and the United Nations - suspended direct aid to the government after Hamas beat Fatah in elections and took power last March. Israel has withheld most Palestinian tax revenues and the government has been unable to pay its 161,000 employees - who support a million Palestinians - in full for a year.
The United States is likely to continue its boycott, but a US official said yesterday that unofficial contacts with reformist Finance Minister Salam Fayyad might be possible.
The Minister for Foreign Affairs, Dermot Ahern, has welcomed the formation of the Palestinian national unity Government.
In a statement, Mr Ahern described the move as a positive development. "There is now a significant opportunity, which should not be lost, to build a real momentum for lasting peace", he said.
"In the coming days and weeks, the Government will work for a positive and creative response by the EU. We must be ready to work with President Abbas and with the new government, on the basis of an active commitment to a two-State solution.
"There must also be a clear end to all violence."
Mr Ahern also called on the new Palestinian government to "do everything possible to achieve the immediate release of the kidnapped Israeli soldier, Corporal Shalit. Israel should also immediately release all detained Palestinian legislators."