Close aides of the Palestinian leader said the talks were being put on hold until after Mr Abbas returns from a trip to New York to attend the annual United Nations General Assembly, because of disagreements with the ruling Islamist movement over existing deals with Israel.
"All of the president's efforts have been disrupted by a number of statements from leaders of Hamas announcing the lack of readiness of any government formed by Hamas to respect the obligations and agreements of the Palestinian Liberation Organisation," aide Nabil Amr said in a statement.
As a result, Mr Abbas has decided on "the freezing of efforts to form the national unity government," he said.
The PLO is the Palestinian umbrella organisation that has historically been responsible for negotiating with Israel.
Ahmed Abdel Rahman, a spokesman for Mr Abbas's Fatah party and a close advisor to the president, said: "Talks are frozen until Abbas returns from New York because it is not possible for the candidate to head the new government to say 'I don't believe in the past agreements'."
Hamas downplayed the statements, however.
Prime minister Ismail Haniya said that "there is agreement between us and president Abu Mazen to... resume (the talks) when he returns from his visit to the United States", it said.
Earlier a Hamas government spokesman, Ghazi Hamad, said it was no longer possible to turn back on the proposed unity government. "The idea of a national unity government has become an idea that all parties are bound to," he said.
Last week Mr Abbas and Mr Haniya announced that after weeks of tortuous talks they had agreed on a platform for a national unity government.
Palestinians hope the formation of a new cabinet will lead the West to lift a freeze on resources to the aid-dependent Palestinian government that was imposed after Hamas assumed power in March.
The European Union and the United States, along with Israel, consider Hamas a terrorist organisation and are demanding that it renounce violence, recognise the Jewish state and agree to abide by past Israeli-Palestinian agreements if the financial assistance is to resume.
Hamas has killed scores of Israelis in attacks over the years, but has not claimed responsibility for an attack inside the Jewish state since January 2005.
The platform for the future Palestinian coalition government agreed on by Mr Abbas and Mr Haniya last week is based on a June 27 agreement, signed by most Palestinian factions, that implicitly recognises Israel.
It calls for anti-Israeli attacks to be confined to the occupied West Bank and Gaza Strip, and for an independent state to be created within their borders, carrying implicit recognition of Israel's right to exist.
But on Saturday Mr Haniya told reporters that any future unity government -- which he had been expected to head -- would not necessarily recognise past agreements signed with Israel.
The June 27 initiative "does not speak about recognising the agreements signed with the Israeli occupation, but talks about dealing with these agreements in a way that serves the greater interests of the Palestinian people.
"And that does not mean that we will recognise these agreements," he said.
Mr Haniya's comments came on the eve of Mr Abbas's scheduled trip to New York, where he is due to plead the Palestinian case in a speech before the General Assembly and in face-to-face meetings with US Secretary of State Condoleezza Rice and Israeli Foreign Minister Tzipi Livni.
The meeting with Livni will end a hiatus of more than six months in official ties between Israel and the Palestinian Authority.
Mr Abbas must convince a cautiously upbeat EU and a more sceptical United States that the future Palestinian government is committed to meeting their demands, and the Haniya statement has made his task more difficult, his aide said.
The already tense negotiations between Fatah and Hamas have stumbled in recent days over the distribution of ministerial portfolios and after five intelligence officers were gunned down in a brazen daylight attack close to Mr Haniya's Gaza City home.