The rival Hamas and Fatah parties froze talks Monday on forming a Palestinian unity government, officials said, a new setback in efforts to form a more moderate coalition acceptable to the West.
The deep differences raised questions about the ability of the sides to reach a deal that could end months of painful economic sanctions that have bankrupted the Palestinian government and caused widespread hardship in the West Bank and Gaza Strip.
The sudden announcement of a breakdown came after months of negotiations that appeared to be heading toward formation of a Cabinet of independent experts to replace the Hamas-led body. Palestinian President Mahmoud Abbas of Fatah met late Sunday with Prime Minister Ismail Haniyeh of the ruling Islamic Hamas in Gaza, and officials said the meeting was cordial.
But Abbas aide Nabil Amr said Monday that the talks had reached a standstill.
"We would say talks are suspended now," he told a news conference. "What we have agreed upon is only the first mile over the 1,000-mile road."
It wasn't clear whether the suspension was the sign of a real crisis or simply a negotiating tactic by Abbas' weakened Fatah Party.
Hamas officials denied any serious trouble. "Talks are continuing on the highest levels," Haniyeh said.
The two sides earlier agreed on a U.S.-educated academic as candidate for prime minister to replace Haniyeh, and crafted a foundation for a joint government that would leave negotiating with Israel up to Abbas, a moderate, while Hamas would deal with day-to-day issues.
The U.S. and Europe cut off aid to the Palestinian government when Hamas took office in March after sweeping Fatah out of office in a parliamentary election, labeling Hamas a terror group for its history of suicide bombings and other attacks against Israelis.
The West insists that before it would restore aid, the Palestinian government had to recognize Israel, renounce violence and accept past peace accords. Hamas refused _ its ideology does not accept the existence of a Jewish state in an Islamic Middle East.
Even if the sides reach agreement, it remains unclear whether the "division of labor" formula, with Abbas handling diplomacy while Hamas sticks to its hard line, would be acceptable to the West.
Hamas political leader Khaled Mashaal held talks overnight in Damascus with Abbas envoy Ahmed Qureia, but the meeting focused on proposals for bringing Hamas into the PLO, a separate issue that has long been under discussion without progress.
Relations with Israel have deteriorated since Hamas took office, especially after Hamas-linked militants captured an Israeli soldier in a cross-border raid last June.
Israel has been carrying out a military offensive in the Gaza Strip since the capture, while Palestinian militants continue to fire homemade rockets into southern Israel, launching at least eight rockets Monday. No injuries were reported. Last week, an Israeli woman was killed in a rocket attack.
Last week Israeli forces wrapped up a deadly, destructive weeklong sweep through the northern Gaza town of Beit Hanoun in an unsuccessful attempt to stop the rocket barrages, and the next day, errant Israeli shells killed 19 members of a Gaza family.
U.N. High Commissioner for Human Rights Louise Arbour began a five-day trip to the region Monday with a visit to the town.
"I'm basically here to express my concern and bring some comfort, I hope, by showing these victims that the world has not abandoned them," Arbour said. The commission has already voted condemnation of Israel, the only country the body has censured during its six-month existence, for the shelling.
In nearby Beit Lahiya, dozens crowded around the home of a Hamas militant to prevent Israel from hitting the building in an airstrike.
The crowd volunteered to serve as human shields after the homeowner received an order from the army that it planned to destroy the site, residents said. It was the third time in recent days that a Palestinian crowd has forced the army to call off an airstrike.