Israel nixed a planned round of peace talks with Ramallah and Prime Minister Benjamin Netanyahu lashed out at Palestinian Authority President Mahmoud Abbas Wednesday for not choosing peace, hours after rival Palestinian groups Fatah and Hamas agreed to reconcile.

The Prime Minister’s Office said it had canceled the planned talks between Israeli Justice Minister Tzipi Livni, Palestinian negotiator Saeb Erekat and American mediator Martin Indyk, but offered no formal reason why. But unnamed sources in Jerusalem told Channel 2 News that the Fatah-Hamas unity deal appeared to spell the end of the peace process, which was already in deep crisis with no Israeli-Palestinian agreement on extending negotiations beyond an April 29 deadline.

Earlier in the day, officials from the Palestine Liberation Organization and Hamas agreed to form a unity government within five weeks and to call for presidential, parliamentary and provincial elections within six months of the coalition taking form.

The move followed several years of bitter fighting between the groups.

Netanyahu followed the announcement by issuing a harsh statement, charging that the Palestinian leader was uninterested in peace talks.

“I said this morning that Abbas needs to choose between peace with Israel and an agreement with Hamas, a murderous terror group that calls for the destruction of the state of Israel and is recognized by the US and the European Union as a terrorist organization,” he said. “Tonight, as talks were still ongoing about the extension of peace negotiations, Abbas chose Hamas and not peace. Whoever chooses Hamas doesn’t want peace.”

Earlier in the day, Foreign Minister Avigdor Liberman warned that any deal between the PA and the Hamas terror group would signal the end of the peace talks.

“Mahmoud Abbas must decide if he wants to make peace, and if he does, with whom,” Liberman said in a statement. “It’s impossible to make peace with both Israel and Hamas, a terror organization that calls for the destruction of Israel. The signing of an agreement for a unity government between Fatah and Hamas is a signature on the end of negotiations between Israel and the Palestinian Authority.”

Palestinian negotiator Saeb Erekat maintained Wednesday that a peace agreement with Israel cannot be reached without internal Palestinian unity, indicating that the deal could advance the stalled peace negotiations, Israel Radio reported.

Saeb Erekat (photo credit: Miriam Alster/Flash90/File)

However, he also insisted Israel is not interested in reaching a final deal, and expressed his frustration with previous meetings with Livni and Indyk, in which he said the sides could not overcome their differences.

Shortly after the joint press conference in the Gaza Strip on Wednesday, in which the PLO and Hamas formally declared the formation of a unity government, Israeli jets struck a target in the northern part of the Strip.

A number of bystanders were injured in the joint operation between the IAF and Shin Bet, but the intended target was not killed. The targeted man had been involved in recent rocket attacks on southern Israel, security sources said.

Raphael Ahren and Times of Israel staff contributed to this report.