Incoming prime minister Ismail Haniya, his beard neatly trimmed and dressed in a sombre business suit, was the first to lay his hand on the Koran.
"I swear by God to be loyal to the homeland, its holy places, people and its national heritage, and to respect the constitution and the law, and uphold entirely the interests of the Palestinian people," he said.
The other members of the 24 member cabinet, including one woman and one Christian, then walked up to take the same oath, their right-hand placed on their holy book.
The ceremony took place at the parliament building in Gaza City in the presence of Abbas, as well as Haniya and nine other Gaza-based ministers.
The proceedings were transmitted by video link to the main West Bank parliament building in Ramallah where the other 14 ministers were sworn in by a senior Palestinian Authority official who stood in for Mr Abbas.
Israel has barred Hamas members from travelling between the Gaza Strip and the West Bank, citing security concerns.
Historic moment
Mr Haniya described his government's swearing-in as "historic" as he addressed a press conference after the ceremony flanked by his new ministers.
But he pledged to work closely with Mr Abbas, who has criticised the new government's failure to pledge respect for past peace deals with Israel in its program.
"We affirm that the relationship between the government and the presidency of the Palestinian Authority will be one of cooperation, coordination and harmony that serves the highest interests of the Palestinian people," he said.
Hamas's upset victory in January 25 parliamentary elections sent shockwaves through Israel and the West as well as proving a humiliating defeat for the previously dominant Fatah.
Israel has threatened to seal off Palestinian areas as enemy territory if Hamas fails to change its program, and on Wednesday used gunboats to shell northern Gaza for the first time since last summer's pullout.
The Palestinian government also faces serious problems at home, such as failing law and order and a broken economy and Hamas faces alienation abroad after the US banned official contact with it.
Canada boycott
Canada became the first Western government to deliver on its threat to boycott the new government, breaking off all ties and finances.
None of the Hamas ministers has been in government before and they will take over ministries packed with officials loyal to the Fatah party, Hamas' bitter political rival.
However most Palestinians want Hamas to succeed and there will be crucial support from the Muslim world where many people would like to see this Islamist government triumph over the Israeli, US and European efforts to break it.
Mr Haniya has warned the West not to seek to punish the Palestinian people for exercising their democratic choice but he also said he was willing to hold peace talks with world powers, including the United States.
Meanwhile US President George W Bush said it made "no sense" to support the Hamas-led Palestinian government unless the radical Islamic group renounced violence against Israel.
Mr Bush defended his threat to cut funding to the Palestinian government if Hamas refuses to recognise Israel.