Israel has given a cool reception to the formation of a Palestinian national unity government. Agreement on the new government was reached Thursday at a summit in Mecca, Saudi Arabia. Under the deal, the ruling Islamic militant group Hamas will share power with the rival and more moderate Fatah faction. Robert Berger reports from the VOA bureau in Jerusalem.

Palestinian President Mahmoud Abbas, left, listens to Hamas leader Khaled Mashaal, during their meeting in Mecca, Saudi Arabia, 8 Feb 2007

"The Europeans, the Americans, the international community is fundamentally having a consensus here, which is: Hamas must one, recognize our country, Israel's, right to exist; two, they have to totally and unconditionally renounce terrorism and violence; and three, they have to come on line with the peace process, accepting the signed agreements," said Israeli government spokesman Mark Regev.

While Hamas agreed to "respect" previous peace agreements, Israel says that does not go far enough. And there was no mention at all in the coalition agreement of recognizing Israel or renouncing violence. Hamas seeks Israel's destruction through armed struggle, and officials from the group said recognition of the Jewish state is not on the table.

Therefore, Israel believes the sanctions that have crippled the Hamas-led government should remain in place.

"Now, if Hamas has painted itself into the corner, they've got no one to blame but themselves," said spokesman Mark Regev.

But the Palestinians believe Hamas has made sufficient concessions to lift the sanctions. Former Palestinian Cabinet Minister Ghassan Khattib of Fatah.

"A national unity government is good news because it will allow for a political platform which hopefully will enable the international community to resume the aid and support to the Palestinian people," said former Palestinian Cabinet Minister Ghassan Khattib of Fatah.

The United States and European Union gave a cautious but reserved welcome to the Palestinian power sharing agreement. They said they will wait and see how the new unity government lives up to demands to work with Israel as a peace partner and respects existing peace agreements, before lifting sanctions.