Prime Minister Benjamin Netanyahu's office said there would be no talks with the Palestinians unless Hamas agrees to a series of conditions it is unlikely to accept, including recognizing Israel and agreeing to disarm.
The announcement came as Palestinian President Mahmoud Abbas' Fatah government is in talks with Hamas over ending a 10-year split.
Under Egyptian auspices, the Palestinian factions last week announced a preliminary agreement and have formed committees to sort out unresolved issues, most notably who will control Hamas' massive weapons arsenal.
Hamas seized control of the Gaza Strip from Abbas' forces in 2007, leaving the Palestinians divided between two governments. Previous reconciliation attempts have failed, and there is no guarantee that the current round of talks will succeed.
Netanyahu's stance matched past demands placed on Hamas by Israel and the international community, that it renounce violence and recognize Israel's right to exist.
Ahmad Majdalani, an aide to Abbas, said that Hamas would not be part of the new government and would only be included if it accepts the president's agenda of pursuing a peace agreement with Israel.
"Netanyahu is looking for a reason to continue undermining the two-state solution," he said, adding that Israel's continued settlement of occupied lands claimed by the Palestinians is the real reason for the impasse.
Abbas seeks an independent state in the West Bank, east Jerusalem and Gaza. Israel captured the territories in 1967, though it withdrew from Gaza in 2005.
The last round of peace talks broke down in 2014. President Donald Trump's envoy, Jason Greenblatt, has been shuttling throughout the region in search of a formula to restart talks. His office had no immediate comment on Netanyahu's announcement.
There also was no immediate comment from Egypt.
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