Prime Minister Ismail Haniyeh on Thursday presented the list of ministers in his new Cabinet to President Mahmoud Abbas, concluding the formation of a new coalition that Palestinian factions hope will lead the government out of international isolation.

The move cleared the way for a parliamentary vote of confidence in the new government on Saturday. The unity deal between Hamas and Fatah is expected to win easy approval.

"I have handed over to the president the candidates for the new coalition. He has accepted that," said Haniyeh of Hamas. "We are optimistic the government will open a new era."

Israeli officials on Thursday condemned the deal as a "step backward." The U.S. and European Union have not yet decided whether they will lift economic sanctions imposed on the outgoing Hamas-led government.

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Haniyeh said he has received signals that the Europeans are ready to work with his new government, but acknowledged that winning U.S. and Israeli support would be difficult.

"No doubt there is a different position by the American administration and the Israelis," he said. "We are going to do what we can to support national unity, and to remove the siege and to maintain relations with the international community."

Haniyeh and Abbas, of Fatah, agreed to the power-sharing deal last month in Saudi Arabia, but had spent the past few weeks ironing out the final details. Clearing the final obstacle, the men agreed on the appointment of a new interior minister, a sensitive post that oversees several powerful security forces.

Officials identified the new minister as Hani Kawasmi, a senior Interior Ministry civil servant who has good relations with Hamas and Fatah, but does not belong to either party. Mustafa Barghouti, the incoming information minister, confirmed the appointment.

Barghouti said other key appointments included Salam Fayyad, an internationally respected economist, as finance minister, and Ziad Abu Amr, an independent lawmaker, as foreign minister. Haniyeh will remain as prime minister, and Azzam al-Ahmed, head of Fatah's parliament bloc, will be deputy prime minister.

In all, Hamas will get nine Cabinet posts and Fatah will get six.

Israel and the Quartet of Mideast peace makers — the U.S., EU, U.N. and Russia — have said Hamas must renounce violence, recognize Israel's right to exist and accept past peace agreements.

The government platform, posted on Hamas and Fatah web sites, includes only a vague pledge to "respect" past peace deals, falling short of explicit recognition of Israel.

The government program also affirms the Palestinians' right to resist and "defend themselves against any Israeli aggression." At the same time, the platform calls for maintaining and expanding a truce with Israel.

While many in the West consider "resistance" to be a code word for violent attacks, the Palestinians have a much vaguer definition, including anything from armed attacks to street protests.

In the first Israeli reaction to the deal, a senior Israeli government official on Thursday called it a "step backward" for peace prospects. The official who spoke on condition of anonymity pending a formal Israeli announcement said Israel would try to rally international opposition to the government.

Nabil Abu Rdeneh, a top aide to Abbas, urged the international community to give the government a chance, despite misgivings about Hamas. Israel, the U.S, and European Union consider the Islamic militant group, which has killed scored of Israelis in suicide bombings, a terrorist group.

"There will be a new Palestinian government and we call on all parties, including the Arabs, to work and live with this government, and to give it an opportunity," he said Wednesday.

Hamas trounced the more moderate Fatah in parliamentary elections last year, giving it control over most government functions. But the Hamas-led government was crippled by Western sanctions imposed over its refusal to recognize Israel's right to exist.

Abbas, who was elected separately in 2005, has been pushing Hamas since last autumn to join Fatah in a more moderate coalition in hopes of lifting the Western boycott. The negotiations collapsed repeatedly, often sparking rounds of deadly factional fighting in Gaza.

As negotiations continued, there was an exchange of fire between Hamas and Fatah forces in the northern Gaza Strip. Security officials said nine people, including five bystanders, were slightly wounded in the shootout. More than 130 people have died in the infighting since last May.

Fears of further bloodshed led Abbas to agree to the power-sharing deal at talks in Saudi Arabia last month, even though the agreement falls short of the international demands to renounce violence, recognize Israel and accept past peace agreements.

Abbas has told Western powers that the deal is the best he could get from the militant group.

The Palestinian factions were eager to complete the coalition talks ahead of an Arab summit later this month in Saudi Arabia, where they hope to win wider recognition and funding for their new government.

Also, Secretary of State Condoleezza Rice is expected in the region at the end of next week as part of a push to restart peace efforts.

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