Israel will not negotiate with a "Palestinian version of Al-Qaida", Prime Minister Benjamin Netanyahu told British Prime Minister David Cameron on Wednesday.

The Israeli premier plans to impart the same message to French President Nicolas Sarkozy during their meeting on Thursday, in the wake of the Islamist Hamas movement's reconciliation with Palestinian President Mahmoud Abbas' Fatah faction.

"Declaring statehood in September is a dictate -- and you don’t achieve peace through dictates. It’s a very bad idea,” Netanyahu told Cameron during their talks in London.

Netanyahu's two day Europe trip –planned before the reconciliation between Hamas and Fatah was announced – was initially intended as part of ongoing efforts to thwart the expected European recognition of a unilaterally declared Palestinian state in September.

In the wake of the Palestinian agreement, however, Netanyahu is now lobbying his European counterparts against the Hamas-Fatah deal in a bid to explain what he sees as the dangerous ramifications of the reconciliation.

Netanyahu's message may not be getting across as clearly as he hopes. British Foreign Secretary William Hague cautiously welcomed the Fatah-Hamas rapprochement earlier this week, though he warned that Britain would "judge everyone by their actions.”

French Foreign Minister Alain Juppe said recently – after meeting with Abbas in Paris last month – that formally recognizing an independent Palestinian state was indeed an option France was “considering,”

Observers close to the parties expect Cameron and Sarkozy to listen politely to their guest, but reserve immediate judgment. The European leaders, say the observers, will also expect Netanyahu to come up his own vision of peace – and not just criticize moves of the Palestinians.

Before beginning his meetings on Wednesday, Netanyahu told reporters: “What happened today in Cairo is a mortal blow to peace, and a great victory for terrorism," emphasizing that just two days ago Hamas condemned the killing of Osama bin Laden.

“When Abu Mazen (Abbas) embraces Hamas- an organization committed to our destruction –it is a tremendous setback for peace and an advance for terror,” Netanyahu said.

Dismissing the possibility that the deal between the factions might bring out a more moderate Hamas and open up opportunities for a broader peace deal, Netanyahu said: "If it walks, shoots and quacks like a terrorist organization, it is a terrorist organization….[Hamas] effectively has Al-Qaida among them. You can wrap it up and dress it in whatever you want.., but they are a terrorist organization.”

Netanyahu repeated this message over and again in closed meetings on Wednesday, before heading over to dinner with Cameron in Downing Street.

“It seems the PA and Hamas have found a warm quarter in Cairo - in the 'new Egypt' -- and they are now, together, moving away from peace,” he told interlocutors. “We are talking about a Palestinian government in which half the members call for destruction of Israel and fire rockets on our cities…That’s who these people are. They are absolutely unreconstructed.”

The only way peace can be achieved, Netanyahu stressed to Cameron, is through “negotiations and concessions from both sides.” And the real issue at hand, he explained, is not the question of a Palestinian State, but rather of a Jewish state.

“There is a belief here that this is a conflict about territory. But that’s not the case. It is a conflict about the Jewish state,” he explained, adding that the fact that the PA is ready to re-join forces with Hamas shows that “they have not given up the ghost of getting rid of us.”

“The one concession we have asked from them -- which they still have not accepted -- is that they accept and recognize the fact of a Jewish state.”

“This is where I would lance the boil—What this union shows is that the PA is taking the Palestinian state, or the two state solution, not as a means to an end of the conflict but as a way to continue it."

“We asked Abu Mazen [Abbas] to stand up to these guys. Not only is he not doing that -- he is on the stage with them,” he said.

“This is the truth. I don’t care how many western diplomats say otherwise. The refusal of the Palestinians Arabs to accept our country is at the root of the conflict,” Netanyahu, confident, said. He can only try to “marshal truth and decency,” in response to all the misconceptions and “lies” going on around, he told interlocutors, saying he was hopeful it was only a matter of time until the European leaders, as he puts it, “wake up to reality.”

“Right now they [Hamas and PA] are having a division of opinion on who will sit on the podium. To Abbas I say - leave the podium and come back to path of peace. To Hamas I don’t say anything.”

In the U.S., there were reservations about the Cairo ceremony. "It's important now that Palestinians ensure implementation of that agreement in a way that advances the prospects of peace rather than undermines them," State Department spokesman Mark Toner said.

"We'll wait and see what this looks like in real and practical terms... We still don't know what, if any changes, there will be at the governmental level," he said.

Toner said the United States continued to believe that Hamas must recognize Israel's right to exist, reject violence and abide by interim peace agreements if it wants to play a meaningful role in the political process.

He said the United States would look at the formation of any new Palestinian government before taking steps on future aid.