Israeli Prime Minister Benjamin Netanyahu has condemned the reconciliation of rival Palestine factions Fatah and Hamas.He says Palestinian President Mahmoud Abbas' agreement to head the caretaker cabinet shows Abbas has “abandoned the path of peace.”

­"Hamas is a terrorist organization that wants to destroy Israel, and is supported by Iran," Netanyahu said hours after the reconciliation agreement was signed in Qatar.

"It is either peace with Hamas or peace with Israel. You can't have them both. If Abbas realizes what was signed in Doha shows that he is choosing to abandon the path of peace and join with Hamas, without Hamas accepting the minimal conditions of the international community," the Israeli PM added.

Abbas, who heads the secular Fatah party, said on Monday that a unity government would “heal wounds and end the chapter of division.” The reconciliation agreement allows the cabinet is to start preparations for general Palestinian elections, both presidential and parliamentary.

The Palestinians have been divided between two contesting governments since 2007, when Hamas ejected Abbas’ forces from the Gaza Strip. The two parties reached a breakthrough peace agreement last year, but their dispute on who would head an interim government delayed its implementation.

The US and Europe, who sending millions of dollars in financial aid to the Palestinian Autonomy, said earlier they would not keep up ties with a cabinet including even a single Hamas member. Previous year, Washigton blocked $200 million in a response to the Palestinian bid for statehood at the UN. In order to avoid that, the fresh pact between the two factions proposes the interim government be made up of independent technocrats.