The rival Hamas and Fatah groups called off top-level talks on forming a Palestinian coalition government that might ease crippling international sanctions, the latest difficulty in bridging formidable ideological differences.
With the Palestinians stuck, another channel for Middle East progress appeared to open when Israeli media reported on Monday that Prime Minister Ehud Olmert had held a secret meeting with a senior official from Saudi Arabia. Both sides denied the reports.
Palestinian President Mahmoud Abbas, the head of Fatah, postponed his planned trip to Gaza yesterday for coalition talks with Prime Minister Ismail Haniyeh of Hamas.
Senior Palestinian officials said the meeting was called off because Abbas was angered by Hamas officials who accused him of withholding money he controls from the Palestinian people.
Instead, he was planning to send Rauhi Fatouh, a former Palestinian parliament speaker, to negotiate on his behalf in talks with Haniyeh, which could have been held as early as yesterday, Palestinian officials said.
Since a Hamas government took office last March, a cutoff of Western aid has brought the Palestinian Authority (PA) to its knees, leaving most public sector workers without pay for months and shutting down vital projects. Israel and the West hope to pressure Hamas to recognize Israel, renounce violence and accept previous peace accords.
Hamas has refused to bend its main goal of an Islamic Middle East without a Jewish state. Broadening the government to include Fatah -- which favors peacemaking -- could provide a way to bridge the ideological impasse, by entrusting negotiations with Israel to Abbas.
In the meantime, Hamas and Fatah hope, a so-called unity government would allow the flow of international funds to resume.
A preliminary coalition agreement the two sides reached earlier this month is based on a platform calling for a Palestinian state in the West Bank and Gaza. Some say that this implicitly accepts Israel next door, without stating recognition.
In related news, acting Palestinian Finance Minister Samir Aishe said that the PA would pay a full monthly salary of 1,800 shekels (US$400) to nearly 40 percent of civil servants yesterday or today.
Other employees will receive full or partial salaries in the next two to three days, he said.
The wages will be paid from recently transferred contributions by Qatar and Saudi Arabia, which totaled US$65 million, Abu Aishe said. Civil service salaries are vital because they provide for one-third of the Palestinian population.
The prospect of a new front in peace moves emerged on Monday after Israeli media reported that Olmert had met a senior Saudi official.
Saudi Arabia won praise from Olmert for its measured stance during the recent Israel-Hezbollah war, and it has recently revived a peace initiative based on pan-Arab acceptance of Israel in exchange for an Israeli withdrawal from all of the West Bank and east Jerusalem.
The Yediot Ahronot daily reported that Olmert and an unidentified top Saudi official met 10 days ago. The talks focused on Iran's nuclear program and the need to achieve peace between Israel and the Palestinians, the newspaper said.
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