The long-running Hamas-Fatah rivalry escalated in 2007 when the Islamic militant group Hamas seized the Gaza Strip from the internationally backed Abbas in 2007. Hamas, which has carried out scores of bombing, shooting and rocket attacks against Israeli targets, is considered a terror group by Israel and the West.
After the April collapse of a U.S.-mediated Israeli-Palestinian peace talks, the Palestinian rivals revived reconciliation efforts. Negotiators met repeatedly to agree on a government of technocrats backed by both sides that is to prepare for general elections in 2015. In recent days, there were last-minute disagreements, but Abbas' announcement suggests the issues have been resolved.
"The announcement of the government will be on Monday," he said during a meeting with several dozen pro-Palestinian activists from France. "The Israelis informed us today that they are going to boycott us immediately after we form the government."
"They are going to withhold our money," he said, referring to the monthly transfers. "This is our money, not aid from Israel, and we will not stay silent. They want to punish us because we have an agreement with Hamas, which is part of our people."
Abbas, the leader of Fatah, reiterated that the unity government would follow his pragmatic program.
"We say (the government) is going to recognize Israel, denounce violence and recognize the international agreements," he said, echoing the international community's conditions for dealing with Hamas. "This is a technocrat government. It has nothing to do with Fatah, Hamas or any factions."
A senior Israeli government official said the formation of a unity government "is a great leap backward," but declined to say whether Israel would take punitive action. He spoke on condition of anonymity because he was not authorized to discuss the issue with journalists.
Abbas said that "we are going to react to any Israeli action."
He did not elaborate. However, Abbas and his aides have said in the past that they might step up efforts to gain further international recognition of a state of Palestine. The United Nations General Assembly recognized such a state in the West Bank, Gaza Strip and east Jerusalem — lands Israel captured in 1967 — as a non-member observer in 2012.
Palestinian officials have said a state of Palestine is eligible for membership in 63 international organizations, treaties and conventions. Last month, Abbas signed membership requests for 15 conventions, and his aides have said the Palestinians planned to sign up for more in several stages.
Associated Press writer Ian Deitch in Jerusalem contributed to this report.