Israel has hit back hard following an agreement on Palestinian unity by suspending already faltering peace negotiations just days before the expiry of a deadline for the US-brokered process.
The Israeli prime minister, Binyamin Netanyahu, accused the western-backed Palestinian president, Mahmoud Abbas, of forming an alliance with Hamas, which he called "a terrorist organisation that calls for the destruction of Israel" – and hinted at further retaliatory measures.
Netanyahu's comments followed Wednesday's announcement of a unity agreement between Abbas' Fatah movement – the dominant group in the PLO and which governs parts of the West Bank – and Hamas, which controls the Gaza Strip. The US and EU also classify Hamas – whose name means the Islamic Resistance Movement – as a terrorist group, but may review their policies in the light of the unity deal.
"What has happened is a great reverse for peace, because we had hoped the Palestinian Authority [PA] president Abbas would embrace the Jewish state, the idea of two nation states, Palestinian one and a Jewish one," Netanyahu told NBC. "But instead, he took a giant leap backward."
But there was confusion about whether the decision to suspend talks was taken by Netanyahu or the Israeli security cabinet.
According to a senior Israeli official, the meeting of senior ministers ended without a clear decision to suspend talks until the Hamas-backed unity government was formed. But some ministers were surprised by Netanyahu's announcement.
A source close to his office, while refusing to discuss details of the meeting, was clear that peace talks had been suspended by Netanyahu, but added that day-to -day contacts on issues like security would continue.
Palestinian officials said they would now be considering "all options".
On the face of it, the decision to suspend talks is a blow to the US secretary of state, John Kerry, who has spent almost nine months trying to coax Israelis and Palestinians into an agreement about the conflict's most contentious issues. In recent weeks, however, the two sides had moved further apart over prisoner releases, PA moves to join UN bodies and Israeli settlement expansion.
The US has rejected criticism that it helped provide Israel with an exit route from ailing Palestinian peace talks, insisting there is still a slim chance of bringing the two sides back to negotiations.
Kerry phoned Abbas to express US "disappointment" in his alliance with Hamas.
The peace negotiations had been scheduled to expire next Tuesday, with scant hope of an extension. "The idea that the Palestinian unity deal sets anything back on the peace process is not credible because nothing was happening and it was clear to everyone that nothing was going to," said Daniel Levy of the European Council on Foreign Relations thinktank. "Let's not lie to ourselves that things would have changed if the talks had continued."
Israeli anger at the Fatah-Hamas deal was predictable. But some observers suggested the situation suited Israel's prime minister. "With the deal, Netanyahu had a perfect alibi," wrote Noam Sheizaf. "After all, if Abbas is back to doing business with an organisation that refuses to recognise Israel and believes in armed resistance, one cannot blame the Israeli government for abandoning the peace process."
If it holds – three previous attempts have not – the unity deal will end a debilitating seven-year split in Palestinian ranks that has played into Israel's hands and cut off Gaza and its 1.7 million people from the West Bank and from negotiating efforts.
But important differences still separate the two sides: the PLO/PA has recognised Israel and seeks a two-state solution to the conflict. It co-operates on security with Israel – arresting Hamas activists. Hamas refuses to recognise Israel though it is prepared for a long-term truce. It has observed a ceasefire in Gaza. It is hostile to the idea of a two-state solution though sometimes ambiguous about it.
The reconciliation has grown out of the failure of the peace talks. It has advantages for Abbas, who faces a crisis of legitimacy and has nothing to show for his moderation – enemies call it "collaboration" –except more Israeli settlements. Moves toward unity and the promise of elections within six months will be popular. Hamas, the weaker party, has suffered from stagnation in Gaza and the loss of support from Egypt after the overthrow of the Muslim Brotherhood. "Hamas," said a veteran observer of the Palestinian scene, "has got nowhere else to go, nothing better to do."
Abbas, who succeeded Yasser Arafat as PLO leader but has none of his charisma, has insisted that any reconciliation with Hamas will be on his terms and that he will remain in charge of negotiations policy. Western diplomats insist that it will have to be so if the US and EU, which bankroll the PA and fear the consequences of its collapse, are to continue paying.
The EU said it welcomed the Palestinian unity agreement but said the priority remains peace talks with Israel. The US state department said: "Any Palestinian government must unambiguously and explicitly commit to nonviolence, recognition of the state of Israel, and acceptance of previous agreements and obligations between the parties. If a new Palestinian government is formed, we will assess it based on its adherence to the stipulations above, its policies and actions, and will determine any implications for our assistance based on US law."
