|Israeli prime minister Benjamin Netanyahu|
Benjamin Netanyahu attacked the reconciliation agreement as a "great victory for terrorism".
Speaking before a meeting with David Cameron in London, the Israeli prime minister also warned that the formation of a Hamas-Fatah coalition government in the Palestinian territories represented "a tremendous blow to peace".
Mr. Netanyahu will carry the same message to Nicolas Sarkozy, the French president, when he arrives in Paris today as his right-wing government seeks to gain European support for sanctions against the new Palestinian leadership. But there was little to suggest that Mr. Netanyahu would have his way.
EU delegates joined officials from the United Nations and the Arab League at a ceremony in Cairo that brought the leaders of the two rival factions together for the first time since 2007.
As ordinary Palestinians celebrated the reunification of the West Bank and Gaza, Mahmoud Abbas, the president of the Palestinian Authority and leader of the secular Fatah faction, pledged his commitment to making the reconciliation deal work.
"We announce to Palestinians that we turn forever the black page of division," he said. "We are certain of success so long as we are united."
Fatah and Hamas, its Islamist rival, fought a brief civil war in 2007 that left deep scars on Palestinian politics.
When it was over, the two components of the Palestinian territories effectively became separate entities, divided ideologically as well as geographically, with Gaza under Hamas control, with the West Bank in the hands of the Fatah-dominated Palestinian Authority.
European states, including Britain, have been cautiously welcoming of the reconciliation deal, accepting that unless Mr. Abbas could claim to speak for the 1.5 million people of Gaza as well as the larger West Bank, he had no real mandate to negotiate with Israel. Mr. Cameron was expected this evening to assure Mr. Netanyahu of Britain's continued support for Israel while at the same time urging him to view the wave of pro-democracy movements in the Arab world as an opportunity rather than a threat.
It is also hoped that Mr. Abbas can use his moderating influence to persuade Hamas to recognize Israel's right to exist, to abandon terrorism and to accept previous peace deals - three demands the international community says the group has to accept in exchange for legitimacy in the West.
Israel insists that such an outcome is unlikely and that Hamas will be strengthened by the agreement and could even use the West Bank to launch rocket attacks on its territory.
Mr. Abbas claimed that such arguments were being used by Israel as "a pretext to avoid negotiations" and insisted that the reconciliation deal would advance the peace process.
Khalid Mescal, the political leader of Hamas, also welcomed the deal, saying: "We have decided to pay any price so that reconciliation is achieved. Our real fight is with the Israeli occupier", (which really means "Attack at every opportunity).
Yet many observers think the reconciliation deal, seen as essential if Mr. Abbas is to win UN backing for Palestinian statehood in September, is unlikely to survive.
Many of the most contentious issues dividing the two factions remain unresolved, including the future of Hamas's military wing which is supposed to be incorporated into the Palestinian security forces - a step strongly opposed by the Islamists, who has the strong desire to annihilate Israel.
Committees have been established to address such outstanding issues and to prepare the way for presidential and parliamentary elections, which are meant to be held within a year under the terms of the deal.