a final status to the Palestinian-Israeli conflict by mid-2014. The Israeli negotiating team was led by veteran negotiator Justice Minister Tzipi Livni, while the Palestinian delegation was led by Saeb Erekat, also a former negotiator. Negotiations started in Washington, DC and were slated to move to the King David Hotel in Jerusalem and finally to Hebron. A deadline was set for establishing a broad outline for an agreement by 29 April 2014. On the expiry of the deadline, negotiations collapsed, with the US Special Envoy Indyk reportedly assigning blame mainly to Israel, while the US State Department insisting no one side was to blame but that "both sides did things that were incredibly unhelpful." Israel reacted angrily to the Fatah–Hamas Gaza Agreement of 23 April 2014 whose main purpose was reconciliation between Fatah and Hamas, the formation of a Palestinian unity government and the holding of new elections. Israel halted peace talks with the Palestinians, saying it "will not negotiate with a Palestinian government backed by Hamas, a terrorist organization that calls for Israel's destruction", and threatened sanctions against the Palestinian Authority, including a previously announced Israeli plan to unilaterally deduct Palestinian debts to Israeli companies from the tax revenue Israel collects for the PA. Israeli Prime Minister Benjamin Netanyahu accused Abbas of sabotaging peace efforts. He said that Abbas cannot have peace with both Hamas and Israel and has to choose. Abbas said the deal did not contradict their commitment to peace with Israel on the basis of a two-state solution and assured reporters that any unity government would recognize Israel, be non-violent, and bound to previous PLO agreements. Shortly after, Israel began implementing economic sanctions against Palestinians and canceled plans to build housing for Palestinians in Area C of the West Bank. Abbas also threatened to dissolve the PA, leaving Israel fully responsible for both the West Bank and Gaza, a threat that the PA has not put into effect. Notwithstanding Israeli objections and actions, the new Palestinian Unity Government was formed on 2 June 2014. Abbas' 2014 peace plan On 3 September 2014, Abbas presented a new proposal for the peace process to John Kerry. The plan called for nine months of direct talks followed by a three-year plan for Israel to withdraw to the 1967 lines, leaving East Jerusalem as Palestine's capital. The resumption of talks was contingent on an Israeli freeze on construction in the