Palestinian President Mahmoud Abbas is to approve the appointment of a new Hamas-led government today but warns that the administration has no future – and will be acting against the interests of the people – unless it agrees to deal with Israel.

In a letter to be delivered to the Hamas prime minister-designate, Ismail Haniyeh, later today, and seen by the Guardian, the Palestinian president lays out fundamental disagreements with the new government’s platform.

Sources close to Mr Abbas, popularly known as Abu Mazen, said the letter is intended to "draw the battle lines" with Hamas, but it also serves as a warning to Israel and foreign powers that threats to sever aid and links are likely to strengthen rather than weaken the Islamist party.

"This is a question of political timing. For now it’s in our interests for Hamas to experience the complexities of government, for Hamas to face the political, economic, security crises," said a source close to the Palestinian president. "Abu Mazen doesn’t want Hamas to fail, he wants it to transform, to accept the basic tenets of the political system."

Mr Abbas also plans to delay the installation of the government until after the Israeli general election on Tuesday out of concern that the swearing in of a Hamas prime minister could push some voters to the right.

In his letter to Mr Haniyeh, Mr Abbas outlines six areas where he says the Hamas cabinet’s programme is "detrimental" to the Palestinian people. He says Hamas policies, including its refusal to recognise Israel, will damage or reverse "diplomatic achievements", give Israel a continued pretext for refusing to negotiate, and cost the Palestinian Authority foreign aid. He also says that Hamas’s stand on Israel prevented the creation of a national unity government with Fatah and other parties which support negotiation.

The source said Mr Abbas was appealing to western countries not to carry out threats to stop giving aid. "Under no circumstances will Abu Mazen allow it to be seen that a Hamas government is failing as a result of a foreign conspiracy. This works for Hamas," he said. "To avoid the perception they fail because of a foreign conspiracy we need the world to show that it is still willing to support the moderate line and not just cut us off."

"Abu Mazen’s view is that the [Palestinian] public has opted for the peace process. What we hope is that there is enough understanding in the international community. No one is asking it to drop the conditions it has placed on Hamas but it has to give some breathing space."

But the source said Mr Abbas’s strategy to pressure Hamas would only work if Israel was willing to make progress towards an end to the conflict that won the backing of ordinary Palestinians.