Palestinian groups have vowed to press on with reconciliation efforts, saying Israel's decision not to hold peace negotiations with a Palestinian government that includes Hamas will have "no bearing" on the implementation of the deal.
Under the reconciliation agreement signed last week, the West Bank-based Palestinian Authority is to resume full control of the Hamas-controlled Gaza Strip by December 1st.
Nabil Abu Rudeineh, an adviser to Palestinian president Mahmoud Abbas, stressed that the reconciliation deal and the return of the Palestinian Authority to Gaza had been welcomed by major powers including the United States.
According to the Palestinian News Agency Wafa, he said that reconciliation efforts are being conducted "in order to achieve the national project, end the occupation and establish the independent Palestinian state on all the Palestinian territory occupied in 1967, with East Jerusalem as its capital".
Officials from Hamas accused Israel of interfering in internal Palestinian affairs and said Palestinians should respond by continuing to strengthen the internal Palestinian front and completing the reconciliation process.
Israel’s security cabinet passed a resolution stating that peace negotiations would not resume as long as Hamas did not disarm, recognise Israel, return the bodies of two Israeli soldiers and return three Israeli civilians who are being held in Gaza.
‘Deal of the century’
The Israeli move could greatly hamper American efforts to restart direct negotiations between Israel and the Palestinians. US president Donald Trump's Middle East peace negotiator, Jason Greenblatt, and his son-in-law Jared Kushner, have held discussions to achieve what Mr Trump hopes will be the "deal of the century", but so far Washington has failed to announce the outlines of such a plan.
The Israeli ministers were briefed by intelligence chiefs that despite the reconciliation moves the chances of a long-term agreement between the Palestinian Authority in Ramallah and Hamas in Gaza remains slim, and Hamas is unwilling to consider relinquishing control of its armed forces.
Mr Abbas has already expressed concern that "he would have a situation like that of Hizbullah in Lebanon", and senior Israeli officials said they could not accept a scenario in which, on the one hand, Hamas would join the Palestinian government, while on the other hand it would continue to hold weapons and manufacture rockets that would be used against Israel.
On Tuesday, Israeli prime minister Binyamin Netanyahu announced plans for hundreds of new homes in West Bank Jewish settlements but minister Naftali Bennett, leader of the far-right Jewish Home party, called for extending Israeli sovereignty over the entire West Bank.