A Palestinian government including Hamas would have to accept nonviolence and recognition of Israel if the Palestinian Authority wants to keep receiving US aid money, sources in Washington said Wednesday.

The officials were responding to an announcement hours earlier that Hamas and Mahmoud Abbas’s Fatah had agreed to reconcile and form a unity government after seven years of bitter fighting.

In Israel, reactions ranged from condemnation to wary encouragement and a wait-and-see attitude.

Israeli media reported unnamed American officials saying that whatever Palestinian government is formed must keep to its commitments, including nonviolence, recognition of the State of Israel, and maintaining previous agreements with Jerusalem.

If those conditions were not met, financial aid to the Palestinian Authority would suffer, a source warned, Channel 2 news reported. The US government was legally barred from funding a Palestinian government that did not honor those commitments, the report said.

Hamas, defined as a terror group by Israel and the US, has refused to recognize Israel, carried out numerous terrorist attacks against Israeli targets, and fired thousands of rockets at Israel from Gaza.

While the US seemed willing to work with a unity government that kept to the PA’s terms, officials on the Israeli right lambasted the reconciliation agreement.

Prime Minister Benjamin Netanyahu charged that Palestinian Authority President Abbas 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.”

Economy Minister Naftali Bennett, who leads the hawkish Jewish Home party, decried the deal, saying it turned the PA into “the largest terror body in the world, 20 minutes from Tel Aviv.”

“The agreement between Fatah, the Islamic Jihad, and Hamas has brought the Middle East into a new diplomatic era,” Bennett wrote on his Facebook page shortly after news of the Palestinian reconciliation broke. “These three terror groups have murdered more than 1,000 Israelis in the streets of Tel Aviv, Jerusalem, and Haifa since 2000.”

Earlier in the day, Foreign Minister Avigdor Liberman warned that the deal could spell an end to peace talks, and the Prime Minister’s Office said Wednesday evening that a round of peace negotiations between the sides scheduled for that night had been called off.

Deputy Foreign Minister Ze’ev Elkin blasted the deal for revealing Abbas’s intentions.

“It should come as no surprise that the same person who refuses to even talk about recognizing the Jewish state and any borders, and pays huge wages to Palestinian terrorists who have murdered Israeli and are sitting in Israeli prisons, finally found that his natural position is in a warm hug with Hamas murderers,” he said in a statement.

MK Zahava Gal-on, leader of the dovish Meretz party, said that Netanyahu left the Palestinian leadership with no choice but to sign the deal.

“Netanyahu pushed Abbas to Hamas and now he is asking him to choose between Israel and Hamas,” Gal-on said. “That is an illogical request that goes against Israeli interests.”

MK Omer Bar-Lev from the opposition Labor party said that there was no need to panic over the deal, but rather it should be accepted for its potential.

“We shouldn’t be scared by the agreement between Fatah and Hamas,” he said. “I believe that it offers an opportunity to change the negotiations with Mahmoud Abbas to be more attainable.”

Chief Palestinian negotiator Saeb Erekat said that the deal was a necessity for diplomacy.

“It is impossible to make peace with Israel without unity in the Palestinian camp,” he said in Gaza, according to Israel Radio.