Hamas leader Ismail Haniya has attacked Israel's decision to release frozen tax funds to the new Palestinian government as "blackmail".
Mr Haniya has called the Israeli move a "bribe"
Mr Haniya, sacked as Palestinian PM after Hamas took control of Gaza, said the money belonged to all Palestinians.
He also rejected a summit beginning in Egypt on Monday, saying only resistance would give Palestinians a state.
Israel's move is designed to shore up support for Palestinian Authority President Mahmoud Abbas.
In another development, an Israeli air strike killed a Palestinian militant in a car north of Gaza City on Sunday night.
The Israeli army says it was targeting a rocket-launching cell.
Islamic Jihad said the dead man was a rocket-making expert and a local commander of the group. Two other militants were wounded in the strike.
It was the first such air strike since Hamas took full control of Gaza 10 days ago.
Mr Abbas' new emergency government does not include Hamas.
The money was originally withheld by Israel after Hamas came to power in the January 2006 election.
Israeli Prime Minister Ehud Olmert said the funds would "gradually help the new Palestinian government, one that is not a Hamas government".
He said: "We will discuss with the Palestinian president tomorrow [Monday], and with the Palestinian government in the summit's aftermath, how we release the funds."
An Israeli official said the money would be released once a mechanism was established to ensure that it does not reach Hamas.
The embargo had a devastating impact on the Palestinian economy and meant that many of the Palestinian Authority's 160,000 employees have not received their full pay in more than a year.
"This money should not be used for blackmail but should be paid to all Palestinians," Mr Haniya said in his first speech since Hamas' Gaza takeover.
The promised release of the funds - thought to be hundreds of millions of dollars - came a day ahead of a Middle East summit in Egypt.
Egyptian President Hosni Mubarak is hosting the talks between Mr Abbas, Mr Olmert, and Jordan's King Abdullah II.
But Mr Haniya said any hopes generated by the prospect of the talks was a "mirage" and "illusions".
He said: "The Americans won't give anything. Israel won't give us anything. Our land, our nation will not come back to us except with steadfastness and resistance."
The summit will be held in the Red Sea resort of Sharm el-Sheikh.
"These talks do not include final status issues, but rather, how the prime minister and the president of the Palestinian Authority would envision a future Palestinian state," Israeli government official David Baker said.