The US says it has decided that it will have contact with some of the new ministers in the Palestinian unity government, sworn in on Saturday.
Abbas and Haniya are seeking an end to international sanctions
A US consular official in Jerusalem said the US would maintain contact with ministers it feels it can work with.
US officials deny this amounts to a shift in policy, saying they will still not deal with Hamas.
Israeli PM Ehud Olmert urged the international community to have nothing to do with the new government.
Mr Olmert said the platform of the Palestinian government led by Ismail Haniya of Hamas included "some extremely problematic elements which can't be accepted by Israel or the international community".
Mr Olmert said the programme fell short of international demands to renounce violence, recognise Israel and accept past peace agreements.
The prime minister's policy statement was overwhelmingly endorsed by the Israeli cabinet on Sunday.
The BBC's Matthew Price in Jerusalem says the international boycott of the Palestinian government appears to be weakening, with a number of countries saying they will deal with at least some of the ministers in the new cabinet.
He says sources at the European Union suggest they expect soon to start contacts with the non-Hamas members - a stance supported by the UK.
The previous cabinet consisted of Islamists from Hamas, which refuses to recognise Israel's right to exist, leading the US and EU to refuse to deal with the Palestinian government.
The new cabinet however includes parties other than Hamas.
The US said on Sunday it was ready to deal with Palestinian government ministers who were not members of Hamas, which is regarded as a terrorist group by Washington.
"Individuals who are not members of foreign terrorist organisations but who do hold office in the unity government, we do not rule out contact with those individuals," said Micaela Schweitzer-Bluhm, spokeswoman for the US consulate in Jerusalem.
It seems the US has decided to subtly change its stance towards the Palestinian government, our correspondent says.
By stating the US will deal with some ministers, Washington is bringing to an end the political isolation it helped to impose on the Palestinian government, our correspondent adds.
Israel had hoped to be able to persuade the international community to maintain its boycott of the Palestinian government, which Israel deems unacceptable.
On Sunday, the Palestinian cabinet held its first session in Gaza City and by video link in Ramallah.
Clashes between Fatah and Hamas gunmen have left scores dead
The government pledged to tackle rampant lawlessness and end the crippling international aid freeze, imposed after Hamas won elections in January last year.
On Saturday, Prime Minister Ismail Haniya of Hamas said his goal was the creation of a Palestinian state that included lands occupied by Israel in 1967.
Our correspondent says that some see this as an implicit recognition of Israel's existence, in contrast with Hamas' past calls to eliminate the Jewish state.
Palestinian Authority President Mahmoud Abbas has appointed a senior official in his Fatah party, Mohammed Dahlan, as national security adviser.
Mr Dahlan is known to be a strong opponent of Hamas, and has been involved in frequent verbal clashes with its leaders.