Impasse as Hamas rejects Fatah's nomination for prime minister

The Hamas militant group yesterday rejected the rival Fatah movement's nominee for prime minister, complicating plans to unify the duelling governments in the West Bank and Gaza Strip and jeopardising international aid for the Palestinians.

Hamas's opposition to Salam Fayyad's nomination marked a key setback in the reconciliation process, which aims to form a caretaker government until elections are held next year. Since the rival factions announced their reconciliation pact last month, aiming to end a four-year rift, they appear to have made little progress in implementing their plans.

Fatah and Hamas are set to meet this week in Cairo to begin the process of appointing members of the new government. It was not clear whether Hamas's announcement was a final decision, or a bargaining tactic as the sides gear up to fill cabinet posts. Mr Fayyad, the Prime Minister of the West Bank-based Palestinian Authority, was nominated by the Western-leaning Fatah over the weekend to remain in his post.

A US-educated economist, Mr Fayyad enjoys the respect of foreign donors. President Mahmoud Abbas of Fatah has concluded that Mr Fayyad's reappointment would ease Western concerns that donor money would fall into the hands of Hamas, which the West considers a terrorist organisation.