Rival Palestinian factions Hamas and Fatah ended a fourth round of power-sharing talks without a deal

Tuesday, but are to meet again on May 16, negotiators said.

The key stumbling block remains the political program of a Palestinian unity government that would be in power until elections are held in January 2010. Prospects of a breakthrough in the next round are slim.

The international community said it will only deal with a Palestinian government that recognizes Israel, a concession the Islamic militant Hamas is unwilling to make.

Egyptian mediators propose that Hamas stay out of the transitional government and instead enable moderate Palestinian President Mahmoud Abbas to run it.

As compensation, Hamas and other Palestinian factions would become part of an advisory committee that would be given a say in the government's decisions.

Fatah negotiator Nabil Shaath said the two teams met Tuesday with Egyptian intelligence chief Omar Suleiman, who asked for a final response to the Egyptian compromise proposal when talks resume May 16.

"Now all the concentration is on the Egyptian proposal, which says that ... Any government formed by President Abbas will conduct the contacts with the international community," Shaath said, adding that Suleiman briefed the negotiators on his recent talks with Israeli officials, and on a meeting between President Barack Obama and Jordan's King Abdullah II earlier this month in Washington.

US willingness to deal with a Palestinian unity government – provided it meets the international conditions – is seen as key to the success of the power-sharing talks. However, Hamas is unlikely to embrace the Egyptian proposal. Hamas leaders, pointing to the movement's sweeping victory in 2006 parliament elections, have said it's unreasonable to ask them to stay out of the government.

Another Fatah negotiator, Azzam al-Ahmed, said progress was made on other issues, including the electoral system, security reform and possible Hamas participation in the Palestine Liberation Organization.