A decree issued by Hamadeh on Monday allows Palestinians born in Lebanon to work in a range of private-sector jobs previously restricted to Lebanese citizens.
The decree does not entirely lift restrictions that have been in place for more than two decades which ban Palestinians from working in professions such as medicine, law or engineering.
"Israel kicked the Palestinians out and they are in our country whether we like it or not," Hamadeh said. "Denying them the right to work is against human rights."
The move comes after tens of thousands of Syrian workers left Lebanon as Syria, under local and international pressure, ended its 29-year military presence in its neighbour in April.
Hamadeh, who is close to Lebanon's anti-Israeli Hizb Allah group, did not say how many of the 390,000 Palestinian refugees registered in the country's 12 squalid camps would benefit from the new rules.
Poor living conditions
Successive Lebanese governments have denied the mainly Sunni Muslim refugees - who lost their homes with the creation of Israel in 1948 - employment and property rights, let alone citizenship, fearing they may settle permanently in the country and upset its delicate sectarian balance.
Palestinians have largely been restricted to jobs provided by UNRWA, the United Nations agency dedicated to Palestinian refugees. Many work in various jobs outside the camps but they often do so illegally.
Palestinian factions in Lebanon welcomed the decision, but called for more steps to improve their people's living conditions, many of whom live in teeming camps where rubbish piles up in rutted lanes and sewage runs through the streets.
"Israel kicked the Palestinians out and they are in our country whether we like it or not. Denying them the right to work is against human rights"
Palestinian refugees in Lebanon face more difficulties than their counterparts in other Arab countries, where they have more rights to education and work.
Palestinian factions in Lebanon say they do not want to settle in Lebanon, but demand they be given their rights in Lebanon until they can return to their homes in what is now Israel.
However, Israel does not recognise the right of Palestinian refugees to return to their homes.