Rival delegations from Palestinian President Mahmoud Abbas’ Fateh Party and the Islamist Hamas movement were in Cairo on Sunday for a new round of reconciliation talks already deemed “difficult”. The two delegations were expected to meet separately with Egyptian security officials ahead of three-way talks on Monday with intelligence chief Omar Suleiman, the state-owned Al Akhbar daily said.

The Fateh team was headed by former prime minister Ahmed Qureia, while the Hamas delegation was led by politburo member Musa Abu Marzouk.

The rival factions are expected to discuss the formation of a national unity government and its programme, the reform of security apparatuses and the drafting of a new elections law, Al Akhbar said.

But hopes of progress were dim after Hamas predicted obstacles.

“This session will be the most difficult, taking account of the inflexibility” witnessed in previous rounds, Hamas spokesman Fawzi Barhum told AFP in Gaza on Saturday.

This round will be the last attempt at inter-Palestinian reconciliation if the talks fail, a member of the Palestine Liberation Organisation warned.

This round “will be the last if there is no agreement between the two parties,” the official said asking to remain anonymous.

The two sides began their negotiations in Cairo on March 10, but so far the talks have made little headway in healing the deep rift between Abbas’ West Bank-based government and the Islamist masters of Gaza.

Discussions were suspended for three weeks on April 2 and a few days later the Egyptian government proposed adjourning efforts to form a unified government and instead setting up a committee to coordinate two rival Cabinets.

An agreement is vital for the reconstruction of the Gaza Strip which has been controlled by Hamas since June 2007.

The impoverished territory was devastated by a massive Israeli offensive at the turn of the year which left more than 1,400 Palestinians dead and caused widespread destruction.

International donors have pledged $4.5 billion to the Palestinians, much of it for the rebuilding of Gaza.

But the aid was promised to Abbas’ government, not to Hamas, and no reconstruction aid has been allowed into the Islamist-ruled territory.

Most Western governments refuse to deal with Hamas until it renounces violence and recognises Israel and past peace agreements.

On Thursday, US Secretary of State Hillary Clinton expressed doubt that the rival Palestinian factions would clinch a deal on a unity government.

The US top diplomat said no aid would flow to Hamas “or any entity controlled by Hamas” and again insisted that Washington would not deal with any Palestinian government that failed to recognise Israel.

Fateh and Hamas have been bitterly divided ever since the Islamists seized control of Gaza in a week of deadly factional fighting.

Egyptian efforts to reconcile them have run up against deep disagreements over the makeup and obligations of a Palestinian unity government.

Hamas has made clearthat it will not recognise Israel as part of any deal.

With hopes of a unity government fading, Egypt has proposed that the two sides instead coordinate their rival administrations in Gaza and the West Bank through a joint committee.