Palestinian talks into second day

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Leaders of Palestinian rivals Fatah and Hamas are to continue crisis talks for a second day in Saudi Arabia's holy city of Mecca.

They are trying to negotiate forming a national unity government and resolve differences that have threatened to ignite a civil war.

Officials from both sides have said they will stay in Mecca until an agreement is reached.

More than 20 people died in clashes between the two sides last week.

"We will not leave this holy place until we have agreed on everything good, with God's blessing," Hamas leader Khaled Meshaal said as the talks began on Wednesday.

A Fatah official said agreement could be reached within 48 hours.

'Black days'

Negotiations on a government of national unity began several months ago, but have repeatedly broken down amid factional violence and disagreement over any new administration's policy towards Israel.

Fatah leader and Palestinian Authority President Mahmoud Abbas met Hamas leaders Mr Meshaal and Ismail Haniya around a table in a palace overlooking the Haram mosque, housing Islam's most revered shrine, the Kaaba.

KEY ISSUES Reported sticking points: Wording of commitment to previous Israeli-Palestinian agreementsPost of interior minister Areas of agreement: Principle of forming unity government Haniya to continue as PM Foreign and finance ministries to be headed by independent candidates <a class="" href="/1/hi/world/middle_east/6334315.stm">Press holds breath</a>

"We want to create a unity government and that is everyone's demand. We want a government that can end the blockade," Mr Abbas said.

"Recent days have been very black and may God not allow them to return... We don't want blood spilt."

Later Nabil Amr, a spokesman for Mr Abbas, said general talks had been completed and the sides were now working on forming a new cabinet.

He said agreement had not yet been reached on who would fill the key post of interior minister, but that Salam Fayyad and Ziad Abu Amr would take finance and foreign affairs respectively, AFP news agency reported.

Mr Meshaal asked the international community to respect whatever deal emerged.

Mr Abbas has said any new administration must recognise Israel and stand by previous peace agreements - both actions that Hamas has so far ruled out.

The main international donors to the Palestinians launched a crippling aid boycott after Hamas won elections in January 2006.

As the talks began, King Abdullah of Saudi Arabia called on both groups to respond "to the voice of reason" and "stop this bloodshed".

But as their leaders talked through the night in Mecca, the gunmen back in Gaza fortified their positions in case the talks fail.