Palestinian PM "to resign in two days" to form govt

GAZA, Feb 13 (Reuters) Palestinian Prime Minister Ismail Haniyeh and his Hamas-led cabinet will resign in the next two days to make way for a unity government with the rival Fatah faction, a government official said today.

Haniyeh is expected to lead the new government, according to the terms of a deal agreed between Hamas and Fatah in Saudi Arabia last week which aimed to end factional warfare in Gaza and ease an economic embargo on the Palestinian Authority.

''The prime minister will submit his cabinet's resignation within two days so that he can begin constitutional measures to form the unity government,'' the official, who declined to be named, told Reuters.

In Jordan, Palestinian President Mahmoud Abbas told Russian President Vladimir Putin the step would take place in the next two or three days ''if there are no unpleasant surprises''.

Putin, speaking on the last leg of a Wasia tour, was heard telling Abbas at Amman airport that he hoped economic sanctions Western donors imposed on the Palestinian Authority after Hamas came to power last year would be lifted soon.

Haniyeh earlier said it was too soon to say when he will resign. Officials said he and Fatah's Abbas still had to finalise issues from the Saudi-brokered deal including naming an interior minister and deputy prime minister.

Haniyeh met leaders of 13 Palestinian factions today, seeking to win support for the power-sharing deal with Abbas.

''Constitutional measures will begin to implement the agreement on the ground,'' said Palestinian cabinet spokesman Ghazi Hamad after the meeting.

''There are consultations between President Mahmoud Abbas and Prime Minister Ismail Haniyeh. We are working speedily and we do not want to waste any time,'' he said.

The two men could meet in the next two days, he added.

DIFFERENCES REMAIN Abbas and Hamas have also still to settle their differences over the fate of Hamas's 5,600-member ''executive'' police force.

Fatah is pushing for the force to be broken up, whereas the Islamist group wants to keep the force together. Fighting between Hamas and Fatah killed more than 90 Palestinians between late December and early February.

Hamas has rejected conditions set by the ''Quartet'' of Wasia mediators for restoring direct aid to the Palestinian Authority - recognition of Israel, renunciation of violence and acceptance of existing interim peace agreements.

The Quartet is comprised of the United States, the European Union, Russia and the United Nations.

Russia and some EU countries have welcomed Thursday's Hamas-Fatah agreement, which made no explicit commitment to recognise Israel. The United States has withheld judgment.

Israeli officials said the Jewish state was considering suspending contacts with Abbas if the unity government did not meet all three Quartet demands.

The move could increase pressure on Abbas and hinder US efforts to revive long-stalled peace talks. US Secretary of State Condoleezza Rice plans a three-way summit with Abbas and Israeli Prime Minister Ehud Olmert in Jerusalem on February 19.

Reuters SSC RN2319