Israeli officials said on Tuesday confidence-building measures with the Palestinians would be cancelled in light of an Abbas pledge to free the Popular Front for the Liberation of Palestine (PFLP) secretary-general, Ahmad Sadat, from imprisonment in Jericho after the town is handed back to the Palestinian Authority.
In 2002, a Palestinian court convicted Sadat and three PFLP members on planning the assassination of Israeli tourism minister Rehavam Zeevi.
The Palestinian Authority (PA) then agreed with Israel to hold Sadat and his colleagues under US-British custody as an alternative to handing them over to Israel.
"We will carefully review if there was any means to continue the process at a time when the message sent by Abbas is very negative and very contradictory to the new spirit that we wanted to see prevailing in our region," Israeli foreign minister Silvan Shalom told Radio Israel.
Israeli Defence Minister Shaul Mofaz also reaffirmed that he had come to an agreement with the Palestinians on Monday that detainees in Jericho would remain in custody, particularly those he described as the murderers of the former Israeli tourism minister.
The Palestinian official in charge of the procurement section under the late PA chairman Yasir Arafat, who was accused of smuggling weapons to the Palestinian territories, will also be freed, Abbas said.