(Adds Rice comments) By Sue Pleming JERUSALEM, Feb 18 (Reuters) - Palestinian President Mahmoud Abbas defended his unity deal with Hamas in talks with Secretary of State Condoleezza Rice on Sunday after U.S. and Israeli threats to shun a coalition government. Rice told reporters any new Palestinian government must meet international conditions, but the United States was committed to working with Abbas and would wait until after a new government was formed before deciding how to deal with it. "We know that when that government is formed we will be making our decision on the basis of whether or not it meets the Quartet principles," Rice said. The Quartet of Middle East mediators, comprising the United States, the European Union, Russia and the United Nations, has called on any Palestinian government to recognise Israel, renounce violence and abide by interim peace accords. A top security adviser to Abbas, Mohammed Dahlan, acknowledged the government's programme "doesn't meet the Quartet's conditions". But Saeb Erekat, another senior Abbas aide, said: "Abu Mazen (Abbas) specified (to Rice) that his paramount, cardinal interest is to end the Palestinian inner-fighting, to end the chaos and lawlessness." Rice said the United States wanted to continue working with Abbas as "we think he is an important figure in moving towards the (U.S.) president's vision of two states", adding Washington could deal with him separately from a new government. MONDAY MEETING Rice travelled to the occupied West Bank to meet the moderate Palestinian leader just hours after Israeli Prime Minister Ehud Olmert said prospects for peace had dimmed. Rice, Olmert and Abbas are all due to meet in Jerusalem on Monday, but no joint news conference is planned -- a sign that expectations are low. The top U.S. diplomat depicted Monday's meeting as "informal discussions" and not negotiations and conceded she was not sure what the prospects were for success. "But I'm committed to this and seeing what we can do to improve life for the Palestinian people and seeing what we can do to improve security for the Israeli people and to realise the two states living side by side in peace," Rice said. Abbas said they would explore "the horizon for the peace process" at Monday's talks, as well as discuss the new Fatah-Hamas coalition. The deal that leaders of the Islamist Hamas movement reached in Saudi Arabia with Abbas's Fatah faction ended weeks of internal fighting that killed more than 90 Palestinians. But Western officials said the agreement fell short of meeting policy terms set by international mediators. Rice later met Olmert, who told his cabinet on Sunday that U.S. President George W. Bush had agreed in a telephone call to boycott the planned unity government if international terms were not satisfied. "A Palestinian government that does not accept the Quartet's conditions cannot receive recognition, and there will not be cooperation with it," Olmert said before meeting Rice. Palestinians had hoped the power-sharing pact, which contained a vague promise to "respect" previous peace deals, could persuade Western donors to restore direct aid cut off to the Palestinian Authority after Hamas won election a year ago. Senior Palestinian officials said Abbas replied angrily to a U.S. official who warned him Saturday that Washington would have no contact with unity government ministers, including Fatah members, if the Quartet's terms were not met. "President Abbas ... shouted (at the official), saying: 'You are placing pressure on me. I have internal pressure -- the pressure is unbearable. The only alternative to this agreement is civil war'," one Palestinian official said. (Additional reporting by Wafa Amr in Ramallah)
