Palestinian terrorism got a boost from President Obama’s decision to continue to work with -- and finance -- a “unity” government that includes Hamas, a certified terrorist group dedicated to Israel’s extermination.

With one swoop, Obama undercut Israeli Prime Minister Benjamin Netanyahu’s strategy of isolating the new Palestinian regime, while disregarding Hamas’s blood-soaked record of thousands of rocket attacks against the Jewish state.

The White House and the State Department were quick to argue that it was worth to wait and see whether the “unity” government hatched by Palestinian President Mahmoud Abbas would conform to basic U.S. parameters for keeping the peace process alive -- recognition of Israel and renunciation of violence.  But that’s already been rejected by Hamas, which insists on a single Palestinian state from the Jordan River to the Mediterranean Sea.  Hamas also defends use of violence -- “resistance” is its favorite euphemism – to achieve its objectives.

Secretary of State John Kerry telephoned Netanyahu to give him the news that the Obama administration would proceed to work with the “unity” government -- never mind that it’s a package that includes Hamas.  U.S. officials said the administration retains the option to halt funding of the new Palestinian regime if Hamas gets out of line. But there are few believers in such a scenario.

For Netanyahu, It was a bitter pill to swallow. Less than 24 hours earlier, he had appealed to the international community not to recognize the new Palestinian government. During Sunday’s cabinet meeting, Netanayhu declared that Hamas “is a terrorist organization that calls for the destruction of Israel and the international community must not embrace it.” 

“This will not strengthen peace,” Netanyahu added. “It will strengthen terrorism.”

Netanyahu’s inability to sway Obama opened a new chapter in their fractious relationship.

Abbas’s Palestinian Authority has been getting nearly $500 million a year in U.S. aid. But the administration is barred by law from funding any “government that includes Hamas as a member, or that results from an agreement with Hamas and over which Hamas exercises undue influence.”  Still, Obama feels that he can run roughshod over these congressional stipulations.

His decision also runs counter to sentiment on Capitol Hill, where lawmakers from both parties have called for cutting off money to any Hamas-tainted Palestinian regime. In the end, appropriations committees may have a different view from Obama’s when it comes to continuing the flow of U.S. taxpayers funds to the Palestinians.

Immediate reaction from  U.S. Jewish leaders has been highly critical. Except for J Street, a purportedly liberal group harshly critical of Israeli policies. Like the White House, J Street believes that the U.S. can do business with Hamas -- a strategy built on costly illusions.

Leo Rennert is a former White House correspondent and Washington bureau chief of McClatchy Newspapers