Palestinian rivals ready to form coalition

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The prospect of Hamas sharing power in a coalition Palestinian Authority was in sight last night after the Palestinian President, Mahmoud Abbas, announced a deal with the Prime Minister, Ismail Haniyeh, on a "political agenda".

A Fatah-Hamas coalition based on at least the implicit recognition of Israel appears to offer the most realistic chance of easing the crippling Israeli and international economic blockade which has inflicted even deeper poverty and insecurity on Palestinians, especially those living in Gaza.

Tony Blair indicated on his trip to the Middle East that the international community would be prepared to open contacts with such a unity government - but with the proviso that it adhered to the preconditions of recognising Israel, renouncing violence, and adhering to previous agreements signed by the Fatah-led PA.

The small print of the political agreement between Mr Abbas and the Hamas Prime Minister remained unpublished. But officials on both sides suggested that it would be based on the so-called "prisoners' document" signed by a group of members from both factions last May, and the 2002 Beirut initiative, in which Arab states promised recognition of Israel in return for the latter returning to 1967 borders.

The wording of the prisoners' document envisaged a "final" two-state solution to the conflict, and if endorsed by Hamas's leadership it would be the first time the faction had formally recognised partition of what was Palestine until 1948.

With Mr Haniyeh sitting beside him, Mr Abbas said on Palestinian TV: "We have finalised the elements of the political agenda of the national unity government ... Hopefully, in the coming few days we will begin forming the government of national unity."

Tzipi Livni, Israel's Foreign Minister, reacted to Mr Abbas's announcement by urging the international community not to waver in demanding acceptance of its three preconditions and added that the main question was whether "we are seeing a real change here". The US administration said that it needed further details of the deal.

The normally hardline spokesman for Hamas, Sami Abu Zuhri, reinforced widespread expectations that Hamas would not explicitly recognise Israel - at the very least ahead of any substantive peace process - by declaring that its position had not changed, and adding: "We will never recognise the legitimacy of the occupation." But an official travelling with Mr Blair, who returned home from Lebanon yesterday after urging a "re-energising" of the Middle East peace process, said: "Of course we have to see the details, but potentially this is a highly significant announcement.''

While the prisoners' document - drawn up by a group of inmates in an Israeli jail led by the popular Fatah leader Marwan Barghouti - stops well short of meeting the demand for a renunciation of violence, it implies that armed attacks against Israel could be limited to those within the occupied West Bank.

Hamas officials indicated yesterday that Mr Haniyeh wanted to remain as Prime Minister in any new coalition, and it was not clear how many of the new ministers would be from Fatah. This is an issue likely to be discussed in negotiations in coming days.

Mr Olmert indicated for the first time during Mr Blair's trip that he would be prepared to meet Mr Abbas without setting the precondition of the release of Gilad Shalit, the Israeli soldier seized by Hamas and other militants on 25 June. But he has so far been adamant that any further progress would depend on the preconditions imposed on Palestinians for implementation of the all-but-moribund "road map" - including the disarming of Hamas, elected to office in January this year.

* Up to 90 per cent of investigations into complaints of attacks on Palestinians and their property by Jewish West Bank settlers are closed by police without any charges being filed, an Israeli human rights group said yesterday.

The 148-page report from the two-year-old voluntary organisation Yesh Din said that "Israel was abusing its obligation to defend the Palestinian civilian population in the Occupied Palestinian Territories against the criminality of Israeli civilians". The report blames "serious faults" in the Israeli military and police.