The Hamas-led Palestinian government has defied a veto by President Mahmoud Abbas on its plan to form a shadow security force led by a top militant.
Mr Samhadana's group is involved in firing rockets into Israel
Mr Abbas has ordered Palestinian security forces to ignore the Hamas plan, which would see a new force recruited from among militants.
It would be led by Jamal Abu Samhadana, wanted by Israel on terror charges.
Hamas insisted its interior minister had the authority to take the decision and said it would talk to Mr Abbas.
"The decision was taken in accordance with the basic law, which gives the interior minister the right to take measures in order to maintain security and public law and order," said Hamas spokesman Ghazi Hamad.
"We will resolve the differences with dialogue."
The security forces are led by officers loyal to Mr Abbas's Fatah party, BBC Arab affairs analyst Magdi Abdelhadi notes.
Hamas has always been fully aware of the fact that it cannot dislodge the current leaders of the security forces without the risk of plunging Palestinian society into civil strife, our analyst adds.
Palestinian Interior Minister Said Siyam justified the creation of a new force by saying it would help deal with rampant crime in the Palestinian territories.
However, Mr Abbas ruled that the minister's decision was "illegal and anti-constitutional", an aide said, and a presidential decree was issued nullifying the proposal.
"All security leaders, officers and members of the security services are ordered not to deal with these decisions and regard them as if they never happened," the decree states.
Under the Palestinian Authority's basic law, or constitution, the president has the power to veto senior government appointments and has overall control over security.
It is the first time since the Hamas-led government took office that Mr Abbas has used his powers to overturn a decision it has made.
Mr Samhadana, 45, leads the Popular Resistance Committees militant faction and has escaped several Israeli assassination attempts.
The group has been responsible for many attacks on Israel, including rockets launched from Gaza in recent weeks.
"I will continue to hold the rifle and will pull the trigger whenever required to defend my people," Mr Samhadana told Reuters news agency.
On hearing of his appointment, he commented: "Factions and security services should unite in one trench against the daily Israeli aggression against our people."
The Hamas government wants to appoint him to the rank of inspector-general at the interior ministry.
An Israeli cabinet minister, Zeev Boim, said on Friday that Israel had a "long account to settle" with Mr Samhadana, whom he called a "notorious terrorist".
"His nomination gives him no immunity," he told Israeli public radio.
US State Department spokesman Sean McCormack said the formation of the new police force pointed to the "true nature and the true tactics of this particular Hamas-led government".