Israel has said it would not deal with the new Palestinian government made up of rival Palestinian factions Hamas and Fatah.
The unity government was formed today in the hope of ending bloody infighting and of leading the Palestinians out of year-long international isolation.
Prime Minister Ismail Haniyeh of the Islamic militant Hamas announced the final coalition agreement and platform after months of stop-and-go negotiations. It is to be approved by the Palestinian parliament on Saturday.
The coalition platform posted on Hamas and Fatah Web sites calls for continued observance of a truce with Israel but falls short of Israeli, US and European requirements that the new government recognise Israel, renounce violence and accept previous peace deals.
The new government's platform includes a pledge to "respect" past peace deals, but does not explicitly recognise Israel.
It also affirms the Palestinians' right to resist and "defend themselves against any Israeli aggression."
Israeli Foreign Ministry spokesman Mark Regev said his government will boycott the coalition government and encourage other countries to do the same because its program falls short of the international conditions for acceptance that include recognition of the Jewish state.
Western countries have said they will wait for the new government to take office before deciding whether to lift economic sanctions against the Palestinian government.
Howeber, Mr Haniyeh said the Palestinians have received encouraging signals from Europe.
"No doubt, there is a different position by the American administration and the Israelis," he said, adding that the new government would do its best to bring about an end to the boycott and "maintain relations with all the international community."
Haniyeh said he hoped the new government will "launch a new era" for the Palestinians.
Nabil Abu Rdeneh, a senior aide to moderate President Mahmoud Abbas of Fatah, said the new coalition opens the way for a resumption of Israeli-Palestinian peace talks.
"This is the right moment to move toward the peace process," he told reporters. "If it (the international community) is serious, if it is looking toward stability in the Middle East, this is the right moment to go ahead" by implementing the US-backed "road map" peace plan.