Talks between rival Palestinian factions on forming a unity government hit new snags on Monday, complicating efforts to end a crippling international boycott on the Hamas-led cabinet.
An advisor to Palestinian president Mahmud Abbas, whose secular Fatah party has failed for months to create a unity cabinet with the party, announced that talks between the parties had been suspended.
"We can say that discussions have been suspended," advisor Nabil Amr told a news conference in the West Bank political capital of Ramallah.
Abbas and the ruling Hamas recently indicated they were on the brink of cementing an agreement on the make-up of a unity government, after months of deadlock, that Palestinians hope will end a Western aid freeze.
Israel, the European Union and United States have suspended payments to the Palestinian government over refusals by Hamas, which they brand a terrorist organisation, to renounce violence, and recognise Israel and past peace deals.
"No one is satisfied with the results that we have reached up until now. Hamas should be more co-operative on the make-up of the government and its platform," Amr told the news conference.
He charged that matters had reached a "critical point" but results were "very mediocre" and therefore "unacceptable".
Nevertheless Abbas's chief spokesman, Nabil Abu Rudeina, and the head of the current government Ismail Haniya denied that talks were "suspended" even as the Palestinian president readied to leave for a visit to Saudi Arabia.
"Dialogue on the unity government has not broken down and is continuing at the highest level," the prime minister said during talks with representatives of the various Palestinian factions in the presence of Abbas.
"Despite the stumbles in the talks yesterday, they have not been suspended and they are continuing," Abu Rudeina told a news conference.
A Fatah official, who attended recent unity talks in Gaza, said the sticking points were the political platform of the prospective government and on sharing out the key finance, foreign affairs and interior ministries.
Hamas is also demanding concrete guarantees, which Abbas cannot provide, that the international political and financial boycott imposed since March would be lifted after the unity cabinet takes power, said the official.
"It's political blackmail," he fumed on condition of anonymity.
Independent MP Mustapha Barghuti, who mediates in the unity efforts, said that the exiled political supremo of Hamas, Khaled Meshaal, and an Abbas representative, had a "positive phone conversation" on Sunday.
Abbas has been in the Gaza Strip since Thursday for nightly talks with prime minister Ismail Haniya that broke up without declarations of progress.
The president -- who had promised a new government by the end of the month -- was due to leave for talks in Saudi Arabia later Monday focused on the unity talks and international efforts to revive the peace process.
Last Friday, Abbas denied a report that he had rejected Hamas's candidate to head a unity administration, Mohammed Shubair, an independent academic who is considered close to the movement but never joined the party.
A previous Fatah-Hamas agreement in September on a political platform for a unity administration collapsed after Hamas leaders made a series of statements rejecting any recognition of Israel, even implicit.
Top officials from Hamas, which thrashed Fatah in a general election last January, continue to insist the unity cabinet will not recognise Israel.