The global sanctions imposed on the Hamas-led Palestinian government are actually strengthening Palestinian relations with Iran, the director of the Shin Bet security services told ministers on Sunday during a weekly cabinet meeting, Army Radio reported.

Yuval Diskin told ministers that the embargo placed on the leading Palestinian party since its ascension to power last year has led Iran to increase its support of the Palestinians, according to the radio.

"Tehran is offering training and a lot of money," Diskin said.

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The Shin Bet chief also told the cabinet that the increase in violent clashes between the rival Palestinian factions Hamas and Fatah has increased the chances that a unity government will be established in the Palestinian Authority. Diskin also reported significant advances in negotiations over the formation of the unity government.

Abbas denies upcoming Meshal meeting
Also Sunday, Palestinian Authority Chairman Mahmoud Abbas denied reports that he was to hold a meeting with exiled Hamas political chief Khaled Meshal in Damascus in the near future, saying that it was "too soon" to discuss the subject.

The comments contradict statements by Palestinian officials, who said earlier Sunday that Abbas will hold talks with Meshal during an upcoming trip to Damascus.

The officials had said Abbas' talks in Damascus would focus on ways to form a national unity government and ending Palestinian infighting between the ruling Hamas and Abbas' Fatah movement.

Abbas told reporters after meeting U.S. Secretary of State Condoleezza Rice in Ramallah on Sunday that he will go ahead with early elections if new coalition talks with Hamas fail.

The two rival Palestinian factions have made repeated attempts to form a coalition government but failed because of disagreement over key cabinet posts, such as the interior and finance ministries, and the government's political program.

Hamas, which has been dominating the cabinet since winning parliamentary elections in January, has balked at international demands it recognize Israel, renounce violence and accept existing peace deals before Western sanctions on economic assistance to the government could be lifted.

Meshal's deputy, Moussa Abu Marzouk, said Saturday that Abbas' envoys have been holding secret talks with Meshal on the upcoming visit, and expressed hope the talks would lead to solving all outstanding problems between the two groups.