In the latest turn of events in the talks of forming a Hamas-Fatah unity government, Palestinian Authority Chairman Mahmoud Abbas reportedly walked out in anger on Prime Minister Ismail Haniyeh Sunday.

"President Abbas ended the meeting in anger when Haniyeh told him Hamas insisted on the interior and finance ministries and wanted Abbas to approve the employment of Hamas members in senior PA positions," an Abbas aide involved in the talks said.

An aide to Abbas, Nabil Amer, announced Sunday that talks between Hamas and Fatah on a national unity government have been halted.

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"The talks are suspended," Amr told reporters in the West Bank city of Ramallah.

"The only progress that was achieved during the thousand hours of dialogue was the agreement on the prime minister," he said, confirming that Mohammad Shabir, the former head of the Islamic University in Gaza, had been the candidate.

Hamas officials, keen to avoid creating the impression of a crisis, would only go so far as to say that talks had run into serious obstacles, avoiding the phrase "suspended."

"The talks are continuing and they have gone a long way down the road," said Fawzi Barhoum, a Hamas spokesman.

The hope is that a new government that unites "technocrats" and members of Fatah, which is more moderate than Hamas, might open the way for the sanctions to be lifted and for the government to again receive desperately needed Western aid.

Rudwan al-Akhras, a spokesman for Fatah's parliamentary bloc, told Reuters that while talks were suspended it was only a temporary measure and that some contacts were continuing.

Abbas, who has left for a visit to Saudi Arabia, was said to have nominated delegates to continue talks on his behalf.

The process of trying to form a unity government has become so tortuous and divisive in recent weeks that even many Palestinian officials think it will ultimately prove impossible.

Even if it is formed, there is no certainty that the sanctions, which have increased poverty throughout the West Bank and Gaza, where 3.8 million people live, will be lifted.

The United States has made it clear that it will only remove the restrictions if the new government meets three conditions: recognizes Israel's right to exist, renounces violence and agrees to abide by all existing peace deals with Israel.

Even if two of those three conditions might be met, Hamas, which fully intends to remain part of any new government, has said it will never recognize Israel.