Opposition leader Isaac Herzog called US and EU recognition of the new Palestinian government an "avalanche against Israel's foreign policy," reflecting Netanyahu and Liberman's failure to understand the international arena, in a statement released on Wednesday.
"Netanyahu's continuing diplomatic failures brought Hamas into the West Bank," Herzog added. "The man who said he is strong against Hamas is strongest at talk and led even the US to work with the Hamas-PLO government.
"Netanyahu talks and the world does not listen anymore," he said.
Herzog called for the prime minister to come up with a clear diplomatic plan to avoid Israeli turning into a binational state.
Netanyahu has condemned Washington's decision to work with the unity government. But US Secretary of State John Kerry stressed that Washington would be monitoring the Palestinians' commitment to continued cooperation with Israel.
Bayit Yehudi faction chairwoman Ayelet Shaked wondered if "the US would recognize a government run by the Taliban in Afghanistan."
"America's policy of appeasement in the Middle East is a mistake. How many mistakes will they make until they understand?" she wrote on Facebook.
Reuters contributed to this report.