Rival Palestinian factions Fatah and Hamas resumed reconciliation talks in Cairo on Wednesday aimed at agreeing a government of national unity acceptable to the international community.

The Egyptian-mediated talks between the Islamist Hamas and the Western-backed Fatah of Palestinian Authority president Mahmud Abbas were adjourned on March 19 after failing to agree on a new government.

The two factions met on Wednesday in the presence of Egypt's intelligence chief and pointman for Israeli-Palestinian affairs Omar Suleiman, Egypt's official MENA news agency reported.

MENA quoted an unidentified senior Egyptian official calling on Fatah and Hamas to "face their responsibilities and rise above partisan (quarrels) and the fight for power."

"Egypt will invite the rest of the (Palestinian) factions if there is a breakthrough in the discussions," the official said.

Senior Fatah official Nabil Shaath said remaining differences concern the makeup and programme of the government, the system by which elections will be held next year and the future makeup of Palestinian security forces.

Fatah has been pushing for the formation of a government that would be accepted by the international community, which has boycotted previous unity governments that included Hamas.

Hamas, which won Palestinian parliamentary elections in 2006, has refused to recognise Israel, renounce violence, or accept past peace agreements -- the three main conditions set by Israel and the West.

The Hamas team, including representatives from the Gaza Strip as well as in exile in Damascus, is headed by the movement's deputy leader Moussa Abu Marzouk. The Fatah delegation is headed by Ahmed Qorei.

Hamas, which seized the Gaza Strip in a week of deadly fighting in June 2007, routing Fatah forces from the territory, does not recognise Israel and wants to replace it with an Islamic state.

The Islamist movement had agreed with Fatah in early 2007 to form a unity government that "respected" past agreements with Israel.

The Middle East Quartet, comprising the United States, Russia, the United Nations and the European Union, has set conditions on dealing with Hamas that require the movement to recognise Israel, renounce violence against the Jewish state and comply with past Palestinian-Israeli agreements.

Hamas says those conditions are unacceptable.

The talks come as Israeli Prime Minister Benjamin Netanyahu took the helm of a right-wing government that has raised fears about the future of the Middle East peace process.

The Palestinians have given a cold welcome to the new government, with Abbas saying that Netanyahu "does not believe in peace" and urging the international community to pile pressure on Israel.

The European Union last week warned of "consequences" if the new government does not commit itself to the principle of the two-state solution, saying relations would become "very difficult."