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A new Palestinian "consensus government" to be named by the Palestine Liberation Organisation and the Islamist movement Hamas is to be finalised within days, a senior Hamas official said Sunday.

A new Palestinian “consensus government” to be named by the Palestine Liberation Organization and the Islamist movement Hamas is to be finalized within days, a senior Hamas official said Sunday.

Bassem Naim, an advisor to Hamas's premier for the Gaza Strip, Ismail Haniya, said a senior member of Palestinian president Mahmud Abbas's Fatah movement, which dominates the PLO, would meet with Hamas officials in Gaza this week to conclude negotiations.

The Hamas-run government in the Gaza Strip said on Wednesday it had relaxed a ban on Palestinian newspapers published outside the enclave as a gesture of reconciliation to rival group Fatah after their unity deal last month.

The announcement came two days after Palestinian President and Fatah leader Mahmoud Abbas met Hamas's leader in exile, Khaled Meshaal, in Qatar for their first talks since the unity pact was signed.

Hamas will never recognize Israel and will not accept the conditions laid out by the Middle East peacemaking Quartet, according to the Islamist movement's deputy leader.

Speaking late on Saturday, Mussa Abu Marzuq said Hamas, which recently signed a reconciliation deal with the Western-backed Palestinian leadership in Judea and Samaria, would never agree to recognize Israel.

"We will not recognize the Zionist entity," he said at a press conference in Gaza City.

Israeli Foreign Minister Avigdor Lieberman stated on Thursday that if elections were to be held in the Palestinian territories, as Fatah and Hamas have agreed, it is clear that Hamas would win in both Gaza and the West Bank, according to the Times of Israel newspaper.

The newspaper reported that Lieberman told Israel Radio: "It is clear that as soon as Abbas chose to unite with Hamas, it is impossible to make peace with Israel."

Israel's security cabinet met Thursday to weigh its retaliation to a unity deal struck between the Palestinian leadership and the Hamas rulers of Gaza.

Prime Minister Benjamin Netanyahu reacted angrily to Wednesday's agreement between the rival factions accusing Palestinian president Mahmud Abbas of choosing "Hamas, not peace".

Public radio said ministers were likely to announce fresh retaliatory measures on top of a raft of financial sanctions unveiled this month when the Palestinians applied to join 15 international treaties.