GAZA CITY, Gaza Strip (AP) — The Hamas militant group on Sunday rejected the rival Fatah movement's nominee for prime minister, complicating plans to unify the dueling governments in the West Bank and Gaza Strip and jeopardizing international aid for the Palestinians.

Hamas' opposition to Salam Fayyad's nomination marked a key setback in the reconciliation process, which aims to form a caretaker government until elections are held next year. Since the rival factions announced their reconciliation pact last month, aiming to end a four-year rift, they appear to have made little progress in implementing the program.

Fatah and Hamas are set to meet this week in Cairo to begin the process of appointing members of the new government. It was not clear whether Hamas' announcement Sunday was a final decision, or a bargaining tactic as the sides gear up to fill Cabinet posts.

Fayyad, the prime minister of the West Bank-based Palestinian Authority, was nominated by the Western-leaning Fatah over the weekend to remain in his post.

A U.S.-educated economist, Fayyad enjoys the respect of foreign donors. President Mahmoud Abbas of Fatah has concluded Fayyad's reappointment would ease Western concerns that donor money would fall into the hands of Hamas, which the West considers a terrorist organization.

Fayyad is a political independent, but Hamas believes he is nonetheless a political figure.

Hamas official Salah Bardawil told The Associated Press on Sunday that "Hamas will not agree to grant Salam Fayyad the confidence to run the national unity government."

Fayyad's office declined comment. Officials close to Abbas said they believe Hamas' announcement was not final and expressed hope they would still be able to get Fayyad's appointment approved. Hamas has floated several names but not yet announced a formal candidate.

Fatah and Hamas have been at loggerheads since the Islamic militant group won parliamentary elections in 2006. A short-lived unity government disintegrated the following year, with Hamas routing forces loyal to Abbas and overrunning the Gaza Strip. Since then, Abbas has governed in the West Bank only.

Reconciliation is essential for the Palestinians to fulfill their goal of establishing an independent state in the two areas, which lie on opposite sides of Israel.

The two factions have been divided over how to deal with Israel. Fatah favors peace with Israel, while Hamas has rejected international demands to renounce violence and recognize Israel's right to exist.

Last month, Fatah and Hamas signed a deal in Egypt to end their rift and join together in a caretaker government. But implementation of the power-sharing deal has moved slowly.

Fearing international pressure on Hamas could jeopardize hundreds of millions of dollars in international aid, they have committed to putting together a Cabinet comprised entirely of apolitical technocrats. It remains unclear when they will be able to agree upon a slate of Cabinet ministers that is acceptable to the international community.