The Palestinian Authority on Saturday called on a Likud-led Israeli government to recognise previous peace agreements on the occupied territories, as Benjamin Netanyahu appeared set to become Israeli prime minister. Netanyahu was asked on Friday to form a coalition government by Israeli President Shimon Peres, despite his Likud party falling one seat behind the Tzipi Livni-led Kadima party in this month's elections. In his first reaction, Palestinian Authority President Mahmoud Abbas, according to dpa, said the Palestinian leadership "will not deal with the new Israeli government if it doesn't show commitments towards peace." A spokesman for Abbas, Nabil Abu Rudeineh, said in a statement to the Palestinian news gency Wafa that the Palestinian Authority "is ready to work together with any government in Israel if it accepts the two-state solution and signed agreements and stops settlement activities." In Gaza, Hamas spokesman Fawzi Brhoum said "assigning Netanyahu to form a government confirms the Zionists attitude is going towards extremism." "Any claims of this government for peace (with the Palestinians) are illusory," he added.