After signing a reconciliation accord two months ago but agreeing on little since, the widely hailed rapprochement between Hamas and Fatah now resembles little more than a shaky truce.

The festering differences between the two Palestinian political factions have been manifested publicly in bickering over whether to appoint Salaam Fayyad as prime minister in the yet-to-be-formed interim government of technocrats.

Hamas considers Mr Fayyad, the current prime minister of the Palestinian Authority (PA), too responsive to the demands of foreign powers. Mahmoud Abbas, the PA president, and the Fatah faction he chairs, on the other hand, see Mr Fayyad, a former World Bank economist, as an efficient administrator and an indispensible link to wealthy donor nations.

But Palestinian and Israeli analysts claim that the issues that scuttled a face-to-face meeting late last month between Mr Abbas and Khaled Meshaal, Hamas' Damascus-based leader, are more than just about the premiership of a unity government.

For Mr Abbas, they have said, the Islamist group's radioactive reputation among a large cross-section of the international community has been increasingly perceived as a liability in his bid to win recognition for a Palestinian state.

For Hamas, whose leadership is divided over reconciliation, Egypt's alleged promise to end its role in aiding Israel's blockade on Gaza in return for agreeing to sign the reconciliation agreement with Fatah is seen to have gone unfulfilled. Gazans complain that Egypt's transitional rulers still enforce draconian restrictions at the Rafah crossing between Egypt and the Gaza Strip, despite announcing in May that more people would be allowed to pass through it.

"It's not a matter of Fayyad," said Talal Okal, a Palestinian political analyst who lives in Gaza. "It's about deeper political issues. The factions have yet to discuss seriously that which divides them, and the reconciliation agreement is practically empty of any political substance."

Regional upheaval and popular pro-unity demonstrations in March forced Hamas and Fatah to try to end their four-year row, highlighted by Hamas' takeover of Gaza in 2007. Their agreement calls for national elections to be held within a year of its signing. Until then, the plan calls for an interim government of political independents to oversee the affairs in both Gaza and the West Bank.

After repeated delays, that has yet to happen.

At the core of their stagnating accord is US and Israeli opposition to any embrace of Hamas, said Mkhaimar Abusada, a professor of political science at Gaza's Al Azhar University

"My estimation is that when both Hamas and Fatah signed the agreement, they did not realise that both Israel and the US would be as against it as they have been," he said.

Both governments consider Hamas to be a terrorist organisation, and Mr Abbas has been spooked into caution by fears of jeopardising US$500 million a year in American aid, said Mr Abusada.

"So Abu Mazen [Mr Abbas] is thinking, 'Let's keep the situation as it is right now. Let's keep Fayyad as prime minister, leave Hamas in control of Gaza, and focus more on international approval of statehood.'"

Yaron Ezrahi, a professor of political science at Hebrew University in Jerusalem, said the uncertain role of Hamas in a future Palestinian government has persuaded Mr Abbas to distance himself from the agreement while he lobbies for Palestinian statehood recognition.

Despite the moderate tone struck recently by Mr Meshaal, the founding charter of Hamas and its call for Israel's destruction is still a lightning rod for the the group's critics. Hamas has not formally adopted the conditions for support set forth by the Middle East peace quartet of the United States, the European Union, Russia and the United Nations. These consist of renouncing violence and recognising the state of Israel as well as previous Israeli-Palestinian agreements.

For his statehood bid to succeed, said Mr Ezrahi, Mr Abbas is effectively having to "tiptoe" in ambiguity somewhere between his agreement with Hamas and not being perceived as the spoiler of Mideast peace negotiations. That means neither fully committing to the Islamist group nor rejecting it altogether. It also means neither accepting or refusing peace talks with Israel before September, when the UN is expected to decide whether to recognise a Palestinian state.

"It's a difficult but very powerful move that would legitimise the [Palestinian] state and delegitimise [Israel's] occupation, and if I were Abu Mazen, I would not stop that process," he said.

At the same time, Hamas does not appear determined to pull out of the agreement, either.

While Fatah has not released Hamas prisoners held in West Bank jails, as promised, analysts have said that politically motivated detentions by both sides have decreased. That has at least reduced tensions.

George Giacaman, a professor at Birzeit University's democracy and human rights programme, said Hamas seems to be going along with Fatah's foot-dragging. The group seems to be holding out for the results of Egypt's parliamentary elections in September, in the hope that a Muslim Brotherhood victory could lead to an even more sympathetic government in Cairo.

"They are looking forward to more support from Egypt in the future, and maybe they're thinking they can stick it out," he said.

But he warned that prolonged delays could trigger a backlash from the the Palestinian public, particularly from blockaded Gazans, which could bode ill for both factions.

"The current situation," he said, "can't hold indefinitely".