The ceremony took place Monday in Ramallah, the Palestinian seat of government in the Israeli-occupied West Bank. The swearing in marks the end of a seven-year rift between rival factions Hamas and Fatah.
"Today, with the formation of a national consensus government, we announce the end of a Palestinian division that has greatly damaged our national case," Abbas said after the Cabinet was sworn in.
The two sides negotiated until the last minute over the composition of the thirteen member-Cabinet. One contentious issue surrounded the position of prisoner affairs which Hamas demanded be a part of the government. No such minister, however, was sworn in on Monday.
The deal to form the unity government was inked on April 23 in a bid to end years of rivalry between the Fatah-dominated Palestinian Authority in the West Bank and the Islamist Hamas party in Gaza. Hamas took power in the coastal enclave following elections in 2007.
The Palestine Liberation Organization (PLO), which is led by the Fatah party, agreed to work with Hamas to establish an interim government of political independents in order to prepare for long-delayed elections.
On Sunday, Israeli Prime Minister Benjamin Netanyahu told the Israeli cabinet that the unity government would "strengthen terrorism," as it would be affiliated with the militant group Hamas.
"I call on all responsible elements in the international community not to rush to recognize a Palestinian government which has Hamas as part of it and which is dependent on Hamas," Netanyahu said.
"Hamas is a terrorist organization that calls for Israel's destruction, and the international community must not embrace it," he added.
Hamas, which refuses to recognize Israel's existence, is classified as a terrorist organization both by Israel and the West.
hc/dr (AFP, AP, Reuters, dpa)