Abbas has rejected several of Hamas's candidates for the post and Hamas has done the same with 12 names proposed by Abbas.

Haniya was expected to give Abbas a new list of names late on Tuesday, but officials say it was unclear whether any of those would be accepted either.

"Interior minister is still a problem," Tayyeb Abdel-Rahim, an aide to Abbas, said.

Regarding the new names, an anonymous source told Reuters: "It will be up to the president. Hamas wants to end this task as soon as possible."

However, talks broke up late on Tuesday night without any agreement on the interior minstry post; both sides said there would be an anouncement within 48 hours.

Other key cabinet positions, including who will serve as finance and foreign ministers, have been settled.

Israel has vowed to boycott the Palestinian unity government, including non-Hamas ministers, unless it recognises Israel, renounces violence and accepts interim peace deals as demanded by the Quartet of Middle East mediators.