A lasting peace between Israel and the Palestinians is only possible if Hamas is involved, a group of former top statesmen and diplomats said in a letter made public on Friday.

In the letter, which is addressed to US Secretary of State Hillary Clinton and EU foreign policy chief Catherine Ashton, 24 former international figures warned against the dangers of rejecting a recent Palestinian unity deal aimed at ending years of bad blood between the secular Fatah faction and Gaza's Hamas rulers.

Israel slammed the deal as a "great victory for terrorism" in a move which found echoes in Washington, with US President Barack Obama describing it as "an enormous obstacle to peace."

But the letter argued that lasting peace would only be possible with a unified Palestinian leadership, which made reconciliation "a prerequisite" for ending the conflict.

"Reconciliation is... a prerequisite for achieving the two-state solution. It is not an obstacle to it," it said, taking aim at remarks by Israel's premier Benjamin Netanyahu in which he urged Palestinian president and Fatah leader Mahmud Abbas to chose between peace with Hamas or peace with Israel.

"Asking Fatah to choose between making peace with Hamas and making peace with Israel presents a false choice: a lasting peace with Israel is only possible if Hamas is on board," it said.

"As former international leaders and peace negotiators, we have learnt first-hand that achieving a durable peace requires an inclusive approach."

Under terms of the deal signed in early May, the two factions will work together to form a caretaker government of politically independent figures who will govern until elections can be held at some point before May 2012.

It was "imperative" that Washington and Brussels "constructively engage with the transitional government as well as with the Palestinian leadership that results from elections next year," they wrote, warning that failure to do so could have far-reaching consequences.

It warned against repeating past mistakes, recalling a decision by Washington and Brussels to boycott Hamas politically and financially after it secured a surprise victory in legislative elections in 2006.

"In hindsight, those policies were a major setback for the peace process," it said.

"If Palestinian reconciliation is undermined, it will throw the Israeli-Palestinian conflict into an even deeper impasse, with dramatic consequences for all parties and the international community at large."

Rather than being a threat to Israel, the unity deal could enhance its security by helping "consolidate a ceasefire" along the Gaza border, and even help towards securing the release of Israeli soldier Gilad Shalit who was captured by Gaza militants in 2006 and is still being held there.

Among the signatories are four former EU prime ministers, including Italy's Massimo D'Alema and Denmark's Poul Nyrup Rasmussen, and 11 ex-foreign ministers, including Hubert Vedrine of France and Gareth Evans of Australia.

Former Israeli foreign minister Shlomo Ben-Ami and veteran Palestinian official Hanan Ashrawi also signed the letter.

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