A day after his Fatah movement initialed a reconciliation agreement with militant Islamist group Hamas, Palestinian Authority President Mahmoud Abbas sought Thursday to counter warnings from Israel and suggestions in Washington that the accord would undermine peace efforts.

Meeting at his headquarters with a group of Israeli businessmen and former security chiefs advocating an Israeli peace initiative, Abbas gave assurances that the Palestine Liberation Organization, which he heads, would still be responsible for handling negotiations.

“Politics are for the PLO, which means [it’s] for me, and the government will work according to my policy,” Abbas said, speaking in English.

The Hamas-Fatah understanding calls for the establishment of a transitional government of politically independent technocrats to prepare for elections in a year.

Abbas responded to Israeli Prime Minister Binyamin Netanyahu, who declared shortly before the factional accord was announced that the Palestinian Authority had to choose between “peace with Israel or peace with Hamas.”

“Hamas are a part of the Palestinian people, like or dislike. I cannot exclude them,” Abbas said. “You, Mr. Netanyahu, are our partner. We cannot neglect you. So we have to take both, and not to choose between this and that. But please, Mr. Netanyahu, you have to choose between settlement activities and peace.”

Peace negotiations relaunched in September broke off in a dispute over continued Israeli settlement building in the West Bank. The Palestinians insist that there can be no talks unless the construction is halted, while Netanyahu has agreed only to a temporary freeze and demanded that the Palestinians recognize Israel as the Jewish state, a move they reject.

Breaking the impasse could become more difficult with the signing of the agreement between Fatah and Hamas, a group both Israel and the United States consider a terrorist organization. The White House said Wednesday that any new Palestinian government would have to recognize Israel, respect previous accords and renounce violence, conditions that Hamas has refused. The demands have been adopted by the so-called Quartet of Middle East mediators that includes the United States, the European Union, Russia and the United Nations.

State Department spokeswoman Heide Bronke Fulton said Thursday that the United States was continuing its assistance programs to the Palestinian government for now, while seeking more information on the emerging alliance.

“If a new Palestinian government is formed, we will assess it based on its policies at that time and will determine the implications for our assistance based on U.S. law,” she told the Associated Press.

In contrast with Netanyahu, Israeli Defense Minister Ehud Barak appeared to leave some room for maneuvering, telling Israel Radio on Thursday that if a new Palestinian government is formed, Israel should issue “a clear statement, coordinated between us and the Americans, that we will have discussions with such a government if, and only if, it accepts the conditions set by the Quartet.”

On the streets of Ramallah, where protests in recent months have urged an end to the rift between Hamas, which rules the Gaza Strip, and Fatah, which is dominant in the West Bank, there were no signs of celebration Thursday, only a wariness born of years of dashed expectations.

“We’ve heard a lot of promises, but we want to see something real,” said Rabah al-Kasrawi in a shop near Manara Square, the scene of the demonstrations.

Analysts said significant obstacles remained in the way of finalizing the accord, and nailing down the details could prove difficult, particularly when it comes to arranging the elections and jointly supervising rival security forces who fought pitched battles when Hamas seized control of the Gaza Strip in 2007.

“Four years of incitement and war between Hamas and Fatah are not going to be just scrapped in one day,” Mkhaimer Abusada, a political scientist at Al-Azhar University in Gaza, said by telephone. “It’s going to be a very long and tenuous process.”

Khalil Shikaki, a political analyst and pollster in Ramallah, said that while the two factions may have agreed to reconcile, they had postponed the difficult problems dividing them and “may not be able to do it.”

What is clear, Shikaki said, is that regional developments pushed both sides to seek an understanding. A growing challenge to the regime in Syria, which hosts the political leadership of Hamas, made the group realize that its base there may not be permanent, and that it could be left in limbo, he said.

Abbas, who is contemplating moves to seek recognition of Palestinian statehood at the U.N. in September, has much to gain from a reconciliation with Hamas after which he could present himself as the leader of all the Palestinians, not only those in the West Bank.

And with peace efforts stalemated, Abbas may well have been thinking of his legacy, tarnished by the Hamas-Fatah split that happened on his watch, Shikaki said. The Palestinian leader’s likely calculation, he added, was that “if I can’t give them peace, I can give them unity.”