China hailed a Palestinian reconciliation deal on ending a seven-year internal split, saying it will build Palestine's internal solidarity.

Foreign Ministry spokesman Qin Gang said at a daily news briefing on Thursday, "China welcomes the positive progress on Palestine's internal reconciliation, and we congratulate it for this."

Qin's comments came after Palestinian President Mahmoud Abbas' Fatah party and the Hamas movement announced a reconciliation agreement on Wednesday.

Under the agreement, the Fatah party and the Hamas movement will start discussions on forming a unity government within five weeks and hold general parliamentary and presidential elections within six months.

The new deal is the outcome of two days of intensive discussions between Hamas officials and a prominent delegation representing the Palestine Liberation Organization.

"We are convinced that the deal will help build Palestine's internal solidarity. Fundamentally, it will also help the ultimate realization of the Palestinian nation and the peaceful coexistence between Palestine and Israel," Qin said.

He called on the international community to give a clear signal of encouragement and offer continued assistance.

However, the United States said it will have to reconsider its assistance to the Palestinians if Hamas and Fatah form a government together.

"Any Palestinian government must unambiguously and explicitly commit to nonviolence, recognition of the state of Israel, and acceptance of previous agreements and obligations between the parties," a senior US administration official said, speaking to Reuters on condition of anonymity.

"If a new Palestinian government is formed, we will assess it based on its adherence to the stipulations above, its policies and actions, and will determine any implications for our assistance based on US law," the official said.

Providing US aid to a unity government that includes Hamas would be assisting a group the US lists as a terrorist organization.

Meanwhile, Israel canceled a session of talks with the Palestinians that had been scheduled for Wednesday, and the US State Department said the move could derail peace efforts.

Israel's foreign minister said a peace deal with the Palestinians is impossible in light of the agreement to form a unity government.

Avigdor Lieberman told Israel Radio on Thursday that Israel should resist pressure to resume talks with Abbas.

Lieberman said Abbas is involved in "political terror" and reached the deal with Hamas in order to thwart peace talks.

On Wednesday, Israeli Prime Minister Benjamin Netanyahu said Abbas needs to decide whether he wants peace with Israel or the Hamas movement, stressing that only one of those options is attainable.

Abbas responded that the reconciliation agreement does not at all contradict the peace talks with Israel.

"It is in the Palestinian people's interests to restore unity of land and unity of people," and "this unity will boost the establishment of the Palestinian state with east Jerusalem as its capital," Abbas said in an e-mailed statement Wednesday.

He clarified that the inter-Palestinian reconciliation "is backed by the Arab states and the international community, and will boost the position of the Palestinian negotiators to achieve the two-state solution".

Xinhua-Reuters-AP