Hamas must recognize the existence of Israel if the Palestinians are to move forward with their hopes of establishing their own state, former Egyptian foreign minister Amr Mussa said Wednesday.

"It is normal for the Palestinians to reconcile," Mussa said of a recent unity deal struck between the Hamas militants who run the Gaza Strip and the Palestinian Liberation Organization.

However, "I believe that Hamas should declare its acceptance of the Arab initiative of 2002, which is the map of normalization and recognition of the state of Israel together with the establishing of the Palestinian state and the withdrawal of the occupied territory," he insisted.

"If Hamas does do this, it would be a major step in the direction of formulating a favorable all-Palestinian policy towards the Palestinian-Israeli conflict."

Hamas and the Western-backed PLO, which is dominated by Palestinian president Mahmud Abbas's secular Fatah party, signed a surprise reconciliation agreement on April 23 in a bid to end years of bitter and sometime bloody rivalry.

Under terms of the deal, the two sides would work together to form an "independent government" of technocrats, to be headed by Abbas, that would pave the way for long-delayed elections.

The move angered Israel, which has suspended its participation in US-led peace talks, saying it cannot be expected to negotiate with a government which includes members of a party dedicated to its destruction.

Egypt, which was once close to Hamas, has grown increasingly hostile to the militant movement after the Egyptian military ousted Islamist president Mohamed Morsi. Hamas is a Palestinian offshoot of Morsi's Muslim Brotherhood.

The 2002 Arab Peace Initiative was launched by Saudi Arabia and backed by the Arab League.

Under the plan, Arab states would forge full diplomatic relations with the Jewish state in exchange for a withdrawal from land it occupied during the 1967 Six Day War or mutually-agreed upon land swaps.

Mussa, who was Egypt's top diplomat from 1991 to 2001 before becoming secretary general of the Arab League until 2011, is close to former military chief Abdel Fattah al-Sissi, who is tipped to win next month's elections in Egypt.

Abbas held "positive" talks with Hamas chief Khaled Meshaal in Doha Monday in the first meeting since their surprise unity deal last month, Palestinian officials said.

However, the deputy leader of Hamas, Mussa Abu Marzuq, insisted earlier this week that despite the unity deal his group would never recognize Israel.

"We will not recognize the Zionist entity," he told a press conference in Gaza City.