The Israeli security cabinet's decision comes a day after plans for over 1,000 settler homes in the occupied West Bank were announced.
Israel's government decided on Tuesday not to negotiate with a Palestinian unity government that includes Hamas if the movement does not disarm, recognise the country and give up violence.
The decision by Israel's security cabinet, announced in a statement from Prime Minister Benjamin Netanyahu's office, comes after rival Palestinian movements Fatah and Hamas signed a landmark unity deal last week aimed at ending their decade-long split.
The statement said negotiations would not be held until a range of conditions were met.
Beyond the initial three, it also said Hamas must no longer be supported by Iran, which provides it with military assistance.
In addition, it said the remains of two missing Israeli soldiers must be returned from the Gaza Strip to Israel.
Three Israeli civilians believed held in Gaza, all said to be mentally unstable, must also be returned, it said.
Palestinian President Mahmud Abbas' Fatah, based in the occupied West Bank, and Hamas, which runs the Gaza Strip, signed the unity agreement in Cairo on Thursday.
The Abbas-led Palestine Liberation Organisation has recognised Israel, unlike Hamas.
The Palestinian Authority, currently dominated by Fatah, is due to resume control of the Gaza Strip by December 1 under the deal.
However, previous such attempts at reconciliation have repeatedly failed.
A major sticking point is expected to be Hamas's refusal to disarm its 25,000-strong armed wing.
Permits for more settler homes
On Monday, an Israeli committee approved permits for 31 settler homes in Hebron, the first such green light for the flashpoint West Bank city since 2002.
Prime Minister Benjamin Netanyahu has felt increased pressure for settlement expansion from the rightist flank of his coalition, though construction is not imminent as a bureaucratic process must still run its course.
His government has made numerous announcements of settlement building recently, angering Palestinians seeking a state on land Israel captured in a 1967 war but no longer eliciting serious US criticism with President Donald Trump in the White House.
An additional 1,292 settler homes in the occupied West Bank were also advanced on Tuesday by Israeli authorities, in a new push by the government for such approvals, settlement watchdog Peace Now said.
"They are all over the West Bank," spokeswoman Hagit Ofran said, without immediately providing a breakdown.
She said further approvals were expected to come on Wednesday.
They are part of nearly 4,000 settler home plans to be advanced in the West Bank under a push to greatly boost settlement growth, an Israeli official has said.
TRT World's Mohammad Hamayel reports more from Ramallah.
Several hundred Israeli settlers live in the heart of Hebron under heavy military guard among some 200,000 Palestinians.
The Hebron units are to be built on Shuhada Street, formerly an important market street leading to a holy site where the biblical Abraham is believed to have been buried.
The street is now largely closed off to Palestinians.
Hebron is the largest Palestinian city in the occupied West Bank with a population of some 216,000. About 1,000 Israeli settlers live in the heart of the city, which for decades has been a focus of religious friction between Muslims and Jews.
Settlement building in the West Bank and annexed east Jerusalem is considered illegal under international law.
It is also seen as a major obstacle to peace as the settlements are built on land the Palestinians see as part of their future state.