Israeli Prime Minister Benjamin Netanyahu (neh-ten-YAH'-hoo) says a decision by Palestinian authorities to create a coalition government with Hamas is a big step backward for peace.

Netanyahu says he will never negotiate a peace treaty with a government backed by a terrorist organization. He spoke Thursday in an interview from Tel Aviv on NBC News.

He's urging Palestinian President Mahmoud Abbas (mahk-MOOD' ah-BAHS') to change his mind about letting Hamas become part of the government. But Netanyahu says he believes the plans were in the works for weeks at least.

Asked if there was any way he could work with Hamas, Netanyahu said it would immediately have to stop being a terror organization.

He notes that the U.S., European Union and many other nations consider Hamas a terror organization.