Abbas asks Haniyeh to form unity government

GAZA, Feb 15 (Reuters) Palestinian President Mahmoud Abbas formally asked Prime Minister Ismail Haniyeh of Hamas today to form a new unity government and urged him to abide by peace accords signed with Israel.

Haniyeh accepted the task of drawing up a new cabinet at a joint news conference in Gaza City aimed at launching a government that Palestinians hope will end factional fighting and overcome a paralysing Western aid boycott of Hamas.

''Mr Ismail Haniyeh, we designate you to form the Palestinian government,'' Abbas told Haniyeh, standing at his side, after Haniyeh formally resigned his post as prime minister in a procedural move to permit the launch of a coalition cabinet.

Haniyeh remains caretaker prime minister until the new cabinet is formed.

Abbas told Haniyeh ''I invite you to respect'' past Palestinian agreements with the Jewish state. Haniyeh vowed to ''work in accordance'' with Abbas's letter of designation.

It was unclear whether this went far enough towards meeting the demands of the Quartet of West Asia power brokers that Hamas recognise Israel and past peace deals and renounce violence.

A ban on direct Western financial assistance since Hamas came to power in March has pushed the Palestinian Authority to the brink of financial collapse.

The United States told Abbas earlier that it planned to boycott a Palestinian unity government, including non-Hamas ministers, unless international demands were met for policy changes toward Israel, Palestinian officials and diplomats said.

A dispute over the composition of a unity cabinet had disrupted talks yesterday, prompting Abbas to put off an address he had been due to give about the new government.

Ghazi Hamad, spokesman for the current Hamas-led government, said on Israeli Army Radio ''there are a lot of problems''. He cited the naming of an interior minister, a post that oversees security services, as one of them.

FACTIONAL VIOLENCE Another unresolved issue is the fate of Hamas's 5,600-member ''executive'' police force. Fatah is pushing for the force to be broken up but Hamas wants to keep it together.

Fighting between Hamas and Fatah killed more than 90 Palestinians between late December and early February. Both movements cited the violence as a key reason for pursuing a power-sharing pact.

A further complication arose when top Palestinian bank officials said they would not resume transfers to the government without assurances from the United States. Western diplomats said they doubted such assurances would be forthcoming.

A senior Palestinian official said: ''The Americans have informed us that they will be boycotting the new government headed by Hamas.

The Fatah and independent ministers will be treated the same way that Hamas ministers are treated.'' Diplomats familiar with discussions on the issue confirmed Washington's intention to shun members of a unity government unless it satisfied international calls for Hamas to recognise Israel, renounce violence and accept interim peace accords.

In Washington, State Department spokesman Sean McCormack said it would be premature to say whether the US government would boycott all members of a unity government. A senior administration official said no decision had been taken yet.

Abbas will attend a summit in Jerusalem on Monday with US Secretary of State Condoleezza Rice and Israeli Prime Minister Ehud Olmert. Prospects for reviving peacemaking could hinge on the outcome of the Palestinian unity talks.

Envoys representing the Quartet of Middle East mediators -- the United States, Russia, European Union and United Nations -- were expected to meet in Jerusalem on Friday ahead of the summit.

Reuters SSC DB2354