Rival Palestinian leaders from the West Bank and Gaza Strip forged a new reconciliation agreement on Wednesday, angering Israel at a time when US-brokered peace talks are at a standstill.

Washington warned that the accord could seriously hamper American efforts to forge Israeli-Palestinian peace.

Israel's Prime Minister Benjamin Netanyahu slammed Palestinian president Mahmud Abbas for choosing "Hamas, not peace", and a Netanyahu aide said he had called off a peace meeting with the Palestinians scheduled for Wednesday evening.

However, chief Palestinian negotiator Saeb Erakat told AFP that no meeting had been planned for Wednesday.

He said the Palestinians would meet bilaterally with US peace envoy Martin Indyk in Ramallah on Thursday.

Under the rapprochement between the Palestine Liberation Organisation (PLO) -- internationally recognised as the sole representative of the Palestinian people -- and the Islamist Hamas which rules Gaza, the sides agreed to form a "national consensus" government within weeks.

"An agreement has been reached on the formation within five weeks of an independent government headed by president Mahmud Abbas," said a joint statement read by Hamas's Gaza premier Ismail Haniya in front of a visiting PLO delegation.

The new interim Palestinian administration would be charged with holding parliamentary and presidential elections within six months of taking office.

The news brought thousands of people on to Gaza's streets in celebration.

It was not the first time the Palestinian rivals have announced a deal to end seven years of separate administrations in the West Bank and Gaza.

But the latest reconciliation attempt by the West Bank-based Palestinian leadership drew an angry reaction from Netanyahu.

Abbas 'chose Hamas, not peace'

"This evening... Abu Mazen chose Hamas, not peace," a statement from Netanyahu's office quoted him as saying, using the name by which Abbas is familiarly known.

"Whoever chooses Hamas does not want peace."

Abbas denied the charge, saying in a statement: "There is no incompatibility between reconciliation and the talks, especially since we are committed to a just peace on the basis of a two-state solution in accordance with the resolutions of international law."

Shortly after the unity deal was announced, an Israeli warplane attacked a target at Beit Lahiya north of Gaza City, wounding six people, one seriously, the Hamas interior ministry said.

An Israeli military statement described the strike as "a joint counter-terrorism operation" by the air force and the Shin Bet intelligence agency, but indicated that it missed its intended target.

Rockets fired at Israel

Later Wednesday, the Israeli military said Palestinians fired three rockets from the Gaza Strip at southern Israel, one of which hit a compound adjacent to the Erez border crossing.

It later said that it was investigating if that rocket fell on the Israel or Gaza side.

There were no reports of casualties.

The Palestinian agreement was reached during talks in Gaza City between Hamas leaders and a PLO team headed by Azzam al-Ahmad, a senior figure in Abbas's Fatah movement.

It was greeted with public celebration in Gaza City and in towns and refugee camps throughout the enclave, with crowds waving Palestinian flags and shouting "Palestinian unity!"

The rival sides have announced several times before that they would make way for a coalition of technocrats, but such pledges were never implemented.

The latest announcement came with the peace talks brokered by US Secretary of State John Kerry teetering on the edge of collapse, and Washington warned that it could deal them yet another blow.

Any Palestinian government must commit "unambiguously" to the principles of non-violence and to Israel's existence, State Department spokeswoman Jen Psaki said, restating a long-held US position.

"It's hard to see how Israel can be expected to negotiate with a government that does not believe in its right to exist."

Erakat met his Israeli counterpart Tzipi Livni, and Indyk, on Tuesday in what he said was another fruitless bid to extend the peace talks, which are due to end on April 29.

Abbas has said he will extend the negotiations only if Israel frees a batch of Arab prisoners previously earmarked for release, freezes settlement building in the West Bank, including annexed east Jerusalem, and agrees to discuss the borders of a future Palestinian state.