Jerusalem: A reconciliation deal which rival Palestinian movements Fatah and Hamas were to finalise on Wednesday is a "smokescreen," Israel`s home front defence minister Matan Vilnai said.
"Nothing will change after this accord, because all this is is a smokescreen," Vilnai told Israeli public radio as Hamas and Fatah officials prepared for a ceremony in Cairo marking the signing of the deal a day earlier.
"Hamas and Fatah don`t agree on anything and the best example of that came with the killing of the super-terrorist Osama bin Laden," he added.
While Fatah figures and members of the Palestinian Authority in the West Bank welcomed the killing of bin Laden, Hamas`s prime minister in Gaza, Ismail Haniya, condemned the raid that killed the al Qaeda chief.
Vilnai said that Palestinian president Mahmud Abbas, who is also the head of Fatah, "made a mistake in agreeing this deal when Hamas is in a position of weakness, which explains why it made moves towards reconciliation."
The minister said Abbas should have insisted on a "clear declaration from Hamas on recognising Israel and condemning terrorism before signing."
The reconciliation deal signed by Hamas, Fatah and 11 other Palestinian factions on Tuesday provides for the formation of an interim government of independents to lay the groundwork for presidential and parliamentary elections within a year.
It has been welcomed by Palestinians in the divided territories, but Israel responded angrily to the deal, threatening to withhold the transfer of Palestinian tax revenues until it could be sure no money would go to Hamas.
Despite his criticism of the unity deal, Vilnai spoke out against the decision to suspend the transfer of funds.
"The freeze is a mistake, it is money we collect from the Palestinians that belongs to them," he said.
"This decision is a violation of previous agreements. In this instance, we put the cart before the horse. We should have waited to see how they would use the money before acting," he added.
Israel collects taxes for the Palestinians at border crossings and ports and transfers the funds to Abbas`s authority under an economic deal agreed alongside the Oslo autonomy accords.
The revenues amount to between 3.5 and 5.0 billion shekels ($1.04 billion to $1.48 billion) each year and form a significant part of the authority`s budget.