Sticking points

Last month, Palestinian factions had agreed to form five committees to tackle issues such as the composition of security agencies in the Gaza Strip and the West Bank.

The Palestinian territories have seen separate rule for the past 21 months, after Hamas fighters forced Palestinian Authority security forces loyal to Fatah out of the Gaza Strip in June 2007.

Reform of the Palestinian Liberation Organisation (PLO), one of Hamas's demands, has also still to be agreed.

The PLO - dominated by Fatah and allied groups - has represented the Palestinians since 1964. More recent groups, such as Hamas and Islamic Jihad, have never been a part of the organisation, despite enjoying popular support.

Another point of contention is Hamas's acceptance of peace accords signed between Israel and previous Fatah-run governments, which would amount to formally recognising the state.

Among the new government's tasks will be to lead the reconstruction of Gaza, which saw billions of dollars worth of damage during a three-week Israeli offensive earlier in the year.