So, Mahmoud Abbas shows his true colours by jumping into bed with Hamas in a leadership reconciliation agreement, and the response from the European Union is as follows: it ups its donations to the Palestinians by 85 million euros.

Chief Rabbi Lord Sacks has given the government a stern warning about peace in the Middle East, marking the first time he has spoken about Israel in the House of Lords.

The comments came during a debate in Parliament yesterday about the Middle East peace process.

"From my perspective, the Hamas-Fatah deal is fiction," said the IDF officer, looking out from a hilltop over the northern West Bank city of Jenin on Wednesday morning. "None of the Palestinian local representatives or security officers I have spoken to over the past week have said that it changes anything for them."

A serious rift between the British and Israeli governments opened up this week during the visit of Binyamin Netanyahu to London, over the welcome given by David Cameron to the unity deal between Fatah and Hamas.

Israel is understood to be furious that William Hague and Mr Cameron had both made positive public statements about the new pact.

Hamas and Fatah have signed a reconciliation deal in Cairo.

Palestinian Authority President Mahmoud Abbas said the deal, which paved the way for elections and a power sharing arrangement, would end "four black years" of infighting.

A Palestinian official close to President Mahmoud Abbas has called the demand that Hamas recognises Israel's right to exist "unfair".

Benjamin Netanyahu has appealed to Palestinian President Mahmoud Abbas to call off the reconciliation agreement between Fatah and terrorist organisation Hamas.

The deal is to be celebrated at a Cairo ceremony tomorrow, paving away for a unity government and elections.

A Hamas official has claimed Hamas will honour an unofficial truce with Israel following the terrorist organisation's reconciliation with Fatah.

According to an Associated Press report, a Hamas security official said members would hold fire until after a new Palestinian Authority government was formed.