The Palestinians on Wednesday agreed to set up a “government of independents” to prepare for presidential and legislative elections within a year. Hamas is likely to mount a stiff challenge to Fatah if the elections go ahead.
Israel accuses Hamas, which controls Gaza and refuses to recognise the Jewish state’s right to exist, of involvement in rocket attacks over the border.
Among the measures that Israel could take are a reimposition of the freeze on tax transfers to the Palestinian Authority and measures to prevent Abbas and his Prime Minister Salam Fayyad moving freely, Lieberman said.
“The latest events do nothing but reinforce the necessity of relying only on ourselves,” Barak said shortly after the deal was announced, while Prime Minister Benjamin Netanyahu declared that Abbas “must choose between peace with Israel and peace with Hamas”.
The deal, to be signed in Cairo at the end of next week, will mean the release of prisoners held by both sides.
That will mean “freeing hundreds of Hamas terrorists” and handing control of the West Bank to the Islamist movement, Lieberman told military radio. He called on “the international community” to insist that the unity government recognise Israel and renounce violence.
The US called on the new government to “renounce violence, abide by past agreements and recognise Israel’s right to exist”.
Iran welcomed the deal as “the first triumph of the great Egyptian people concerning Palestine” after the uprising that overthrew President Hosni Mubarak earlier this year.
"This deal will lead to the speeding up of developments in the Palestinian arena and the gaining of great victories in facing the [Israeli] occupiers," Foreign Minister Ali Akbar Salehi said.