Abbas sees talks with Hamas at 'dead end'

Palestinian President Mahmoud Abbas has told Jordan that talks on a unity government with Hamas have hit a "dead end" and he will pursue other options, a senior Palestinian official said yesterday.

The "other options" could include the dismissal of the Hamas-led government and the appointment of a new Prime Minister, moves that would signify a new hard line against Hamas that could shake up the Palestinian political process.

Mr Abbas's statement comes a day after Israeli Prime Minister Ehud Olmert made an appeal for peace with the Palestinians and two days before he is to meet US Secretary of State Condoleezza Rice, suggesting that it is part a bout of fresh diplomacy.

If Mr Abbas were to dismiss the Hamas-led government and form a new one, it could open the way for Western financial sanctions, imposed after Hamas came to power in March, to be lifted, removing a heavy burden restraining the Palestinian economy.

At the same time, any move to dismiss Hamas from power, or to call a referendum on whether a new government should be formed, is likely to incite anger among supporters of the Islamist group and may deepen internal violence.

Following the reports of Mr Abbas's statement, Hamas acknowledged that talks on a unity government, which have been off-and-on for months, were at a severe impasse, but said it still hoped that a way forward could be found.

The senior Palestinian official said Mr Abbas had told Jordanian officials during talks in Amman that: "Talks with Hamas over a unity government have come to a dead end. This is not an option he will pursue," the official said of Mr Abbas.

"He is now thinking of other options," having given up hope of reaching an agreement with Hamas, the official said.

Mr Abbas has been trying to get Hamas to meet Western demands to recognise Israel and renounce violence. Hamas, which is formally committed to Israel's destruction, has resisted the calls.

Mr Abbas is to meet Ms Rice in the West Bank town of Jericho tomorrow amid growing US pressure on Israel and the Palestinians to show progress on ending decades of conflict.

President George W. Bush and Ms Rice are due in neighbouring Jordan today for talks with Iraqi and other regional leaders and are widely expected to address the Israeli-Palestinian crisis.

Mr Abbas earlier welcomed Mr Olmert's major policy speech on Monday, which expressed willingness to return to peace talks under the US-backed "road map" and to free Palestinian prisoners in exchange for an Israeli soldier held in Gaza.