Cairo: An Egyptian official says talks are under way between two rival Palestinian factions — the secular Fatah and the militant Hamas — on forming a unity government.
Tuesday`s talks in Cairo came two days after Hamas, which rules Gaza, rejected Fatah`s proposal that its internationally respected economist Salam Fayyad remain prime minister.
The rejection set back efforts by the rival factions, which last month ceremoniously announced their reconciliation, to form a caretaker government and prepare for elections next year.
Hamas sees Fayyad as too close to the West. Fatah believes the US-educated economist is the best candidate to ease concerns that donor money wouldn`t go to Hamas.