Several Israeli ministers have lashed out at the United States over its decision to work with the new Palestinian unity government which includes Hamas.
"Unfortunately, American naivety has broken all records. Any collaboration with Hamas which kills women and children is unacceptable," said Communications Minister Gilad Erdan.
Israel admitted it was "deeply disappointed" after Washington threw its support behind the new Palestinian government, saying it would judge the new lineup "by its actions."
"This American capitulation can only damage chances of resuming (peace) negotiations," Mr Erdan said in remarks communicated by his bureau.
US-led peace talks collapsed in late April after the Palestinians announced a surprise unity deal between leaders in the West Bank and Hamas-run Gaza, with Israel saying it would not negotiate with any government which includes Islamist movement Hamas.
Under terms of the agreement, Hamas and Fatah, which dominates the West Bank administration, worked together to formulate an interim government of independents which will prepare for elections within the next six months.
The government was sworn in yesterday in front of president Mahmoud Abbas, with Washington publicly offering its backing several hours later.
"At this point, it appears that president Abbas has formed an interim technocratic government that does not include ministers affiliated with Hamas," State Department spokeswoman Jen Psaki told reporters.
"With what we know now, we will work with this government," she added.
To add to the embarrassment, Prime Minister Benjamin Netanyahu told the security cabinet that Kerry had promised Israel that Washington would not immediately recognise the new government, Haaretz reported, quoting two ministers present at the meeting.
"I have to say I do not understand this American announcement," said Intelligence Minister Yuval Steinitz, accusing Washington of saying one thing behind closed doors and another in public.
"You cannot present it as a Hamas government internally, then present it publically as a government of technocrats," he told army radio.
"If these (ministers) are people who identify with Hamas, Hamas identifies with them and appointed them, then they are representatives of Hamas. This is a Hamas government, and Hamas is a terror organisation," he said.
Responding to the US announcement, an Israeli government source said Washington's actions were playing into the hands of Mr Abbas.
"If the US administration wants to advance peace, it should be calling on Abbas to end his pact with Hamas and return to peace talks with Israel," he told AFP.
"Instead, it is enabling Abbas to believe that it is acceptable to form a government with a terrorist organisation."