GAZA Palestinian President Mahmoud Abbas formally asked Prime Minister Ismail Haniyeh of Hamas on Thursday to form a new unity government and urged him to respect peace accords signed with Israel.
Haniyeh accepted the task of drawing up a new cabinet at a joint news conference in Gaza aimed at launching a government that Palestinians hope will end factional fighting and overcome a paralyzing Western aid boycott of the Palestinian Authority.
"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 the coalition cabinet.
Haniyeh has up to five weeks to form a government. He remains caretaker prime minister until a new cabinet is formed.
Abbas told Haniyeh "I invite you to respect" past Palestinian agreements with the Jewish state, in language that echoed the wording of an agreement reached last week in talks hosted by Saudi Arabi between Abbas's Fatah and Hamas.
Haniyeh vowed to "work in accordance" with Abbas's letter of designation and said he would launch contacts to form the government. He did not specifically say whether Hamas would drop its refusal to recognize the Jewish state or renounce violence, as the "Quartet" of Middle East power brokers demands.
Analyst Hani Habib said he detected a new tone in Haniyeh's comments, which he described as "a reconciliatory speech on the internal front and a diplomatic language with the West".
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 on Wednesday, prompting Abbas to put off an address he had been due to give about the new government.
Two key issues of dispute were naming an interior minister, a post that oversees security services, and 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 December and 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."
In Washington, State Department spokesman Sean McCormack said it would be premature to say whether the U.S. government would boycott all members of a unity government.
Israeli Prime Minister Ehud Olmert told reporters returning with him from talks in Turkey he was "still gathering all the facts" and had no further comment.
In an apparent bid to ease Western fears of a joint Fatah-Hamas cabinet, Abbas told Palestinian television he hoped for progress at a trilateral summit on Monday in Jerusalem with U.S. Secretary of State Condoleezza Rice and Olmert.
"For the first time we are hearing a new language from the Americans," Abbas said, adding that he hoped for a quick resumption of long-stalled peace talks with Israel.
"We welcome this seriousness and desire ... to reach a solution for our causes within a period of a year, more or less."
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 -- are expected to meet in Jerusalem on Friday ahead of the summit.
(Additional reporting by Jonathan Saul in Ankara, Adam Entous in Jerusalem, Wafa Amr in Ramallah and Arshad Mohammed in Washington)