* Abbas says unity government with Hamas under his command
* Palestinians still seek to renew U.S.-backed peace talks
* Unity government would comprise independent technocrats (Adds Israeli comments)
By Noah Browning
RAMALLAH, West Bank, April 26 (Reuters) - Palestinian President Mahmoud Abbas signalled on Saturday that he remains committed to troubled U.S.-backed peace talks, saying that any unity government agreed with the militant group Hamas would recognise Israel.
Abbas's comments appeared aimed at soothing U.S. concerns about the unity deal he reached on Wednesday with Hamas, an Islamist faction sworn to Israel's destruction and designated by the West as a terrorist organisation.
Israel suspended peace negotiations with Abbas after the reconciliation pact, and the United States said it would reconsider annual aid to the Palestinians worth hundreds of millions of dollars.
"The government would be under my command and my policy," Abbas told senior leaders of the Palestine Liberation Organisation (PLO) at his presidential headquarters in the occupied West Bank city of Ramallah.
"Its purview will be what happens domestically. I recognise Israel and it would recognise Israel. I reject violence and terrorism," he said.
The deal between Hamas and Abbas's Fatah party envisions agreement on a government of independent technocrats within five weeks and elections at least six months later.
Hamas's opposition to Israel does not necessarily contradict Abbas's position, as both sides have agreed that the unity government will not include Hamas members but be comprised of technocrats.
But Israeli Prime Minister Benjamin Netanyahu ruled out talks with such a government.
"That's the oldest trick in the book. It's called the front office-back office gambit," he said, in which "shady organisations" put forward "smooth-talking frontmen - the men in suits," Netanyahu said in an interview with MSNBC on Thursday,
"We will not sit and negotiate with a Palestinian government that is backed by Hamas in which Hamas has effective share of power," Netanyahu said.
Hamas on Saturday said it would not change its stance on Israel. "The recognition of Israel by the president of the Palestinian Authority, Mahmoud Abbas, is not new. What is important is that Hamas did not and will never recognise Israel," Hamas spokesman Sami Abu Zuhri told Reuters.
Abbas seeks a Palestinian state in Gaza, the occupied West Bank and East Jerusalem, lands Israel captured in a 1967 war.
Hamas, which seized control of Gaza from Abbas's secular Fatah in a brief 2007 civil war, retains thousands of fighters and an arsenal of rockets. It has fought repeated battles with Israel since it took control of the enclave.
A senior U.S. official said on Thursday that a unity government formed with Hamas could call into question some $500 million in their annual security and budget aid to Abbas.
A future Palestinian government must "unambiguously and explicitly commit to non-violence, recognition of the state of Israel, and acceptance of previous agreements and obligations between the parties," the official told Reuters.
WILLING TO EXTEND TALKS
Hamas and Fatah have in recent years agreed similar unity deals, that were not eventually implemented. Israeli lawmaker Tzachi Hanegbi, a confidant of Netanyahu, said on Saturday that such a scenario was likely and that it left the door open for talks to resume.
"If the agreement falls through then we come back, the Palestinians know what the Israeli-American proposal is (for restarting negotiations), it can be decided on and talks can be renewed," Hanegbi told Channel Two's Meet the Press.
The Israeli-Palestinian peace talks had shown little sign of progress since they began in July and the United States had been struggling in the past few weeks to extend negotiations beyond an original April 29 deadline for a peace accord.
Abbas said he was open to resuming the talks and pushing on beyond the deadline, as long as Israel met long-standing demands to free prisoners and halt settlement building on occupied land.
"How can we restart the talks? There's no obstacle to us restarting the talks but the 30 prisoners need to be released," Abbas said. "We will present our map ... until the map is agreed upon, all settlement activity must cease completely," he said.
But an Israeli official, speaking on condition of anonymity, said Abbas was "recycling previous terms he knows Israel has not accepted, after he had, time and again in the past month, refused to move forward in the negotiations."
Talks veered toward collapse after Israel failed to release a final group of Palestinian prisoners it had promised to free in March, and after Abbas signed several international treaties, which Israel said was a unilateral move towards statehood.
The peace talks resumed in July after a three-year deadlock. The two sides were at odds over Israeli settlement construction in the West Bank and East Jerusalem, activity most countries deem illegal, and over Abbas's refusal to accept a demand by Netanyahu that he recognize Israel as a Jewish state. (Additional reporting by Nidal al-Mughrabi in Gaza and Maayan Lubell in Jerusalem; Editing by Andrew Heavens and Stephen Powell)
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