A row over the new Palestinian government is driving yet another wedge into already shaky ties between Israel and the US as the once sacrosanct relationship comes under severe strain, analysts say.

Barely had the State Department said it would work with the new "interim technocratic government," just hours after it was sworn in Monday by Palestinian president Mahmud Abbas, when Israeli rage roared across from the Levant.

In what has become a predictable pattern of emotional and angry invective in recent weeks, the Israeli government said it was "deeply disappointed" by the US decision, which means aid will also keep flowing to the Palestinian Authority (PA).

Prime Minister Benjamin Netanyahu was feeling "betrayed and deceived," Israeli public radio said, as Secretary of State John Kerry had promised him Washington would not recognize the new Palestinian government right away.

Another Israeli official was quoted by the Israel Hayom freesheet as saying it was "like a knife in the back."

But one Israeli commentator writing in Haaretz daily suggested the Israeli cabinet had merely rushed into "a sophisticated trap" laid by Abbas in the hopes of driving Israel and the US further apart, and should have just waited to see what happened as Palestinian elections loom.

Ties between the two countries have frayed under the administration of President Barack Obama. He and Netanyahu have had a notably frosty personal rapport despite a fence-mending visit to Israel by the US president last year.

The collapse of the latest US bid to broker peace between Israel and the Palestinians left Washington bloodied and frustrated, and even warier of wading back into the Middle East quagmire.

For their part, Israelis were deeply angered when media reports quoting an unnamed US official -- widely believed to be chief US negotiator Martin Indyk -- laid the blame for the failure of Kerry's peace quest squarely at Israel's door.

State Department deputy spokeswoman Marie Harf sought to temper the angry reaction Tuesday, saying "the United States and Israel have a long, historic and unshakable friendship, period, over many, many decades, over many administrations, through a lot of difficult times."

And she repeatedly stressed that Washington's position on Hamas, which is outlawed as a terrorist organization, has not changed.

"The United States does not and will not provide it assistance per long-standing US policy," she told reporters.

"We do not have any contact with Hamas. No members of Hamas and no ministers affiliated with Hamas, as I said, are part of this government."

- Fight brewing in Congress -

But Middle East expert Marina Ottaway said the US decision to work with the new Palestinian government just drove "another wedge" into the relationship.

"The Obama administration is showing yet again that it is essentially willing to challenge Israel on certain issues," Ottaway, senior scholar on the Middle East at the Wilson Center, told AFP.

The question was whether Obama would be "able to stick to his guns" with a furor already building in Congress, she said.

"There's no guarantee that Obama is going to have the last word on this," she said, predicting the powerful American Jewish lobby would be going into overdrive to whip up a campaign in Congress.

In a sign of a possible new fight with lawmakers, Republican Senator Marco Rubio told AFP Tuesday: "They're making a mistake... I'm very disappointed with the administration's position on this."

"I think we should follow the law and cut off aid. The law is pretty clear: they don't recognize Israel's right to exist, they shouldn't be receiving US aid."

Democratic Representative Eliot Engel agreed, saying: "The United States is under no obligation to give a dime to the PA as it reconciles with a known terrorist group."

Israel was already infuriated by Washington's decision to press ahead with negotiations with Iran to try to rein in its nuclear ambitions, warning loudly that the regime of President Hassan Rouhani was just a "wolf in sheep's clothing."

And Kerry has been the target of bitter insults by Israeli ministers for suggesting that without a peace deal, Israel could see itself increasingly isolated on the international stage.

He was forced to backtrack in April when he was caught warning that Israel could become "an apartheid state with second-class citizens." Tellingly while he admitted he had used a poor choice of words, he did not publicly apologize for what he said.