Palestinian Authority President Mahmoud Abbas has sworn in a unity government, moving to carry out a reconciliation pact between his Fatah faction and the militant Islamist group Hamas that has raised tensions with Israel.
The US said it would work with the new Palestinian government and continue providing it with financial aid, because the interim cabinet is composed of technocrats that do not include ministers affiliated with Hamas.
"Based on what we know now, we intend to work with this government, but we'll be watching closely to ensure that it upholds the principles that President Abbas reiterated today," said State Department spokeswoman Jen Psaki on Monday.
Abbas said the 17-member cabinet, with ministers from both the West Bank and Gaza Strip, would follow his policies and meet international conditions for diplomatic contact: recognition of Israel, renunciation of violence and acceptance of previous accords with the Israelis.
Although members of the new cabinet, endorsed by Fatah and Hamas, were billed as independent professionals unaffiliated with either faction, Israel reiterated on Monday that it would not negotiate with a Palestinian government backed by Hamas, which refuses to recognise Israel and has targeted it with suicide bombings and rocket attacks.
Hamas is considered a terrorist organisation by Israel, the United States and the European Union.
An Israeli official who spoke on condition of anonymity expressed "deep disappointment" with Washington's willingness to work with the unity government.
Israel suspended American-brokered negotiations with the Palestinians in April after Fatah and Hamas reached an agreement to carry out their unity deal.
A statement issued on Monday after a meeting of the Israeli security cabinet said Prime Minister Benjamin Netanyahu had been authorised to impose "additional sanctions" against the Palestinian Authority, but no details were disclosed.
Netanyahu warned that Abbas' agreement with Hamas makes him "directly responsible for terror emanating from Gaza", a reference to rocket attacks on Israel by Palestinian militants. It was not immediately clear what action Israel might take against Abbas in response to fresh rocket strikes.
On Monday, Israeli authorities barred three appointed ministers from leaving Gaza to attend the swearing-in ceremony at Abbas' headquarters in the West Bank city of Ramallah.
Abbas said in a televised speech that the inauguration of the jointly backed government had ended a bitter split between the two Palestinian factions since 2007, when Hamas seized control of the Gaza Strip in a brief civil war, leaving Fatah dominant in the West Bank.
"Today, in forming the government of national consensus, we declare the end of the division which caused disastrous harm to our cause for the past seven years," Abbas said. "Today we announce the recovery of the unity of the homeland and unity of institutions.... This black page in our history has been closed forever."
Abbas said the new government would "naturally abide, like its predecessors, by the commitments of the Palestinian Authority and signed agreements and our political program", which he said were aimed at establishing a Palestinian state that would live "in security and peace alongside Israel in accordance with the two-state solution".
Negotiations with Israel, Abbas said, would remain the responsibility of the Palestine Liberation Organisation, which he heads, not the interim government, whose task would be to prepare for presidential and parliamentary elections next year.
But there was general acknowledgment that major obstacles remained to integrating the dual administrations in the West Bank and Gaza Strip, particularly the security forces.
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