JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu plans to use a visit to Britain and France to portray Palestinian President Mahmoud Abbas's unity deal with Hamas Islamists as a blow to already dim prospects for peace.
Netanyahu is due to hold talks in London with British Prime Minister David Cameron on Wednesday and see French President Nicolas Sarkozy in Paris on Thursday.
It will be the Israeli leader's first trip abroad since the surprise announcement last week that Abbas and his long-time rival Hamas had agreed to a unity pact that envisages formation of an interim government and Palestinian elections this year.
"This is a major problem and raises all sorts of questions, and that issue will be very much on the table," an Israeli government official said on Tuesday.
"If the (Palestinians) are going for a unity government with Hamas, there's no doubt that's a step in the wrong direction -- a very negative step."
Hamas, which seized the Gaza Strip from Abbas's Fatah movement in 2007, calls for Israel's destruction in its founding charter although it has offered a long-term truce in return for Palestinian statehood.
Israel refuses to negotiate with Hamas, and the United States and the European Union also shun the group over its refusal to renounce violence, recognize Israel and accept existing interim Israeli-Palestinian peace accords.
"Obviously, we want the process with the Palestinians to move forward, but up until now their refusal to engage was a problem and now their decision to bring in Hamas, the antithesis of peace, has further aggravated a negative situation," the Israeli official said, giving an overview of Netanyahu's stance.
U.S.-backed Israeli-Palestinian talks on a permanent peace agreement were revived in September but quickly fizzled after Netanyahu refused to extend a limited building moratorium in Jewish settlements in the occupied West Bank, captured by Israel in the 1967 Arab-Israeli War and wanted by Palestinians as part of a future state.
Palestinian leaders have defended the unity agreement, saying reconciliation with Hamas reflects a deep-seated public desire to end internal differences.
The new government, they said, would be comprised of independents and peace talks with Israel would remain the responsibility of Abbas's Palestine Liberation Organization, to which Hamas does not belong.
On Sunday, in response to the unity steps, Israel blocked the transfer of $105 million in customs duties and other levies it collects on behalf of Abbas's Palestinian Authority, a move likely to be raised during the British and French talks with Netanyahu.
Palestinian unity also could help bolster an expected bid by Abbas to win U.N. recognition of a Palestinian state in September, the target date Washington had set for a peace agreement when talks were revived briefly eight months ago.
Israel has been mounting a diplomatic drive against any U.N. statehood ratification.
Netanyahu is due to address a joint meeting of the U.S. Congress in three weeks' time, and aims to focus on the regional upheaval, Iran's nuclear program and the Palestinian issue. He has given no specific details of what he will say.
While those issues will be on the table during his talks in Britain and France, the Palestinian unity moves will be "front and center", the Israeli official said.
British Foreign Secretary William Hague said on Monday that Britain welcomed the deal to end the feud between the factions.
"Of course lots of details have to be worked out and we will have to judge everyone by their actions and intentions. We will continue to work closely on this," Hague said during a visit to Cairo.
The Israeli official said Hamas's praise of Osama bin Laden, the al Qaeda leader killed by U.S. forces on Sunday, "should serve as a wake-up call" to anyone who believed it was anything less than an extreme Islamic organization.
(Editing by Angus MacSwan)