The moves came hours after Prime Minister Benjamin Netanyahu ordered government officials and offices to stop cooperation with Palestinian officials as part of a round of sanctions on the PA as peace talks between the two sides stalled in recent days.
Hamas spokesman Fawzi Barhoun told Maan that Palestinian President Mahmoud Abbas should take advantage of Netanyahu's move and return the favor by ending all aspects of security coordination with Israel.
Abbas should let resistance "deter the Israeli occupation and defend our people, our land, and our holy places," Barhoun said in a statement.
One Israeli official called Netanyahu's order a response to "the Palestinians' grave violation of their commitments in the framework of the peace talks" - an apparent reference to their signing of 15 international conventions last week.
Another official said Israeli cabinet members, directors-general of government ministries and other senior bureaucrats would no longer be allowed to meet their counterparts in the Palestinian Authority, which exercises limited self-rule in the West Bank.
Justice Minister Tzipi Livni, who heads Israel's negotiating team in the troubled US-brokered peace process, and defense and security officials could continue to engage with the Palestinians, the officials said.
Palestinian Labor Minister Ahmad Majdalani, however, downplayed the significance of this decision, noting that "90% of our daily business is dealing with the Israeli military."
"In fact, there are no meetings between Israeli and Palestinian ministers, apart from finance ministers," Majdalani told AFP.
"This decision undermines all international efforts ... to revive the negotiations, to proceed with a constructive solution to the challenges facing the peace process," said PA spokesman Ehab Bseiso.
Israeli and Palestinian officials cooperate on civilian issues such as the environment, water and energy, but Bseiso said this usually does not entail face-to-face meetings.
The PA's main concern focuses on possible economic curbs.
Under interim peace deals, Israel collects and transfers to the PA some $100 million a month in taxes on goods imported into the Palestinian territories. Israel has previously frozen the payments during times of heightened tensions.
Reuters, AFP and Itzhak Benhorin contributed to this report