RAMALLAH, West Bank -- Palestinian President Mahmoud Abbas swore in a national unity government Monday, formally ending a crippling seven-year split with his Islamic militant Hamas rivals but drawing Israeli threats of retaliation.
The unity government's formation and Israel's tough response are part of a wider competition between Mr. Abbas and Israeli Prime Minister Benjamin Netanyahu for international support since the collapse of U.S.-led peace talks between them in April.
Mr. Abbas praised the 17-member unity government, made up of technocrats backed by Hamas and his Fatah movement, as a milestone.
"This black page in our history has been turned forever and will never come back," he said, referring to the Palestinian split that broke open with the Hamas takeover of the Gaza Strip in 2007.
For seven years, the rivals ran separate governments, with Hamas in Gaza and Mr. Abbas ruling autonomous areas of the West Bank.
Mr. Netanyahu said the new government should be shunned because it leans on support from Hamas, a group labeled as terrorist by the West. Mr. Abbas "said yes to terrorism and no to peace," Mr. Netanyahu said after a meeting with his Security Cabinet.
Mr. Abbas said his new Cabinet opposes violence and recognizes Israel, complying with long-standing conditions the West has set for dealing with Palestinian governments. Hamas has rejected such conditions, but Mr. Abbas said he is in charge of the government program.
In Washington, State Department spokeswoman Jen Psaki said the United States intends to work with the new Palestinian government despite Israel's concerns. She also said U.S. Secretary of State John Kerry called Mr. Netanyahu to relay the U.S. position, without offering details. The United States will continue to send aid to the Palestinians, but will closely watch what Ms. Psaki called the "interim technocratic government."
The European Union has said it welcomes unity and would continue funding any government that meets the conditions.
Despite optimism on the Palestinian side, the new Cabinet faces many difficulties. Key disputes, including over how to meld rival security forces in the West Bank and Gaza, have not been resolved. Palestinian dependence on foreign aid will only rise because the new government will be more costly to maintain. Mr. Abbas must blend some 200,000 employees of two administrations.
Israel brushed off Mr. Abbas' assurances about the pragmatic nature of the new government. The Security Cabinet said Israel would not hold peace talks with such a government and authorized Mr. Netanyahu to impose financial sanctions.
It also said Mr. Abbas would be held responsible for any rocket fire out of Gaza. Hamas has killed hundreds of Israelis in attacks over the years and launched hundreds of rockets from Gaza, but largely has observed an informal truce with Israel in recent years.
Mr. Abbas "has forged a pact with Hamas, an organization which has been declared a terrorist organization in the U.S., Europe, Egypt and throughout the world," Mr. Netanyahu said. "The international community needs to treat it accordingly."
Israel in the past has withheld tens of millions of dollars in taxes it collects each month on behalf of the Palestinians, and it is possible that Mr. Netanyahu will take similar action to punish Mr. Abbas. But more centrist Israel politicians urged the government not to rush judgment. Yair Lapid, a senior Cabinet minister, said Israel would have to study the new Palestinian government in coming weeks before making a decision. "It is not time for harsh words, but for caution and stability," he said.
Mr. Abbas decided to reconcile with Hamas after concluding that there was no hope of reaching a peace deal with Mr. Netanyahu. Shortly before a late-April deadline, Israel pulled out of the talks to protest Mr. Abbas' decision to repair ties with Hamas.
The unity government's formation is the most significant step yet toward ending a political split that has weakened the Palestinian case for a state in the West Bank, Gaza and east Jerusalem, lands that Israel captured in 1967. Repeated reconciliation bids have failed, though the split is unpopular among Palestinians.
In recent months, both factions had greater incentives to repair ties. Hamas is amid a major financial crisis due to a border blockade imposed by Israel and Egypt, while Mr. Abbas is in need of a political accomplishment after the collapse of the peace talks with Israel. Mr. Abbas was seen as having the upper hand in the unity negotiations, largely because Hamas has run out of options due to its financial crisis.
The 17 ministers, though nominally independents, are seen as loyal either to Mr. Abbas and his Fatah movement or to leftist factions. None of the ministers is believed to have close ties to Hamas, observers say. The Cabinet is to be temporary and prepare for 2015 general elections, though there are signs that neither side is eager to face presidential and parliamentary elections.