Fatah and Hamas Poised to Name Pm

The two main Palestinian political factions have agreed on a prime minister to head a national unity government in a move aimed at lifting economic sanction, the Associated Press reported today.

Senior Hamas officials in Syria said Hamas and Fatah had agreed on Mohammed Shabir to head the next Palestinian unity government.

The US-educated Mr Shabir, who was in charge of Gaza's Islamic University until 2005, is considered to be close to the militant group Hamas but not an active supporter.

A Palestinian unity government could be in place by December, the Palestinian president and Fatah leader, Mahmoud Abbas, said last week.

The Palestinian prime minister and Hamas leader, Ismail Haniya, said he was prepared to resign if his departure could end the debilitating aid boycott.

Hamas and Fatah have been arguing for months over the formation of an internationally acceptable unity government.

Israel and the west imposed sanctions on the Palestinian Authority when Hamas, which they consider a terrorist organisation, formed a government after a sweeping victory in legislative elections in March.

Since Hamas was elected, Israel has refused to transfer the $60m (£31m) in monthly tax revenues due to the Palestinians, and the west has halted direct financial support for the government.

Some 160,000 government employees, from doctors and teachers to security staff, have gone without their salary, and regular Israeli closures and delays at crossing points out of Gaza have badly hit the already fragile economy.

The Palestinian Authority's inability to pay civil servants has heightened tensions, and supporters of Fatah and Hamas have clashed in recent months.

Gaza has been badly hit by an economic crisis and conflict with Israel. Since militants captured an Israeli soldier near Gaza in June, Israeli military operations have killed more than 350 Palestinians in the densely populated area, many of them civilians.

One of the attacks, an artillery strike last Wednesday on houses in Beit Hanoun, killed 18 members of a single family.

The Israeli prime minister, Ehud Olmert, who is in Washington for talks with the US president, George Bush, urged Hamas to meet US, Israeli and international demands to renounce violence, recognise Israel and accept existing interim peace accords. Hamas has refused.

The British prime minister, Tony Blair, was expected to use a foreign policy speech today to repeat, in words directed at the Bush administration, that no peace is likely in the Middle East without a solution to the Palestine-Israel crisis.