Hamas on Tuesday vowed to avenge the death of a top leader in its armed wing, who was killed earlier in the day in Gaza in renewed violence that erupted as efforts to form a Palestinian unity government bogged down in disagreement.

Hamas blamed Fatah forces for the killing of Ala al-Haddad, Gaza City
commander of Hamas's armed wing, but a Fatah official denied any responsibility, calling it the result of a clan feud.

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"The blood of Haddad will not be shed in vain," Hamas spokesman Abu Obediah said. "We will punish the killers and we will not allow anyone to hide behind the cloak of any security agency."

Al-Hadad, 35, was killed and two members of the group's police force were wounded on Tuesday in separate shootings in Gaza City, a Hamas source and hospital officials said.

An official in Fatah's Preventive Security force in Gaza confirmed that one of its people was wounded in a shooting incident, but said the matter was a family feud and that the officer was not on duty.

The gunbattle erupted after members of a Gaza City family tried to recover a stolen car, and its passengers - members of a Hamas militia - opened fire, the force said.

"The Preventive Security Services and its men were not involved at all in the tragic incident in Gaza," the official said.

The shootings came hours before Abbas was scheduled to resume talks with Prime Minister Ismail Haniyeh of Hamas in the Gaza Strip.

Unity talks snag over key security post
Negotiations over a Palestinian unity government have become bogged down over who will serve as interior minister with control over security services, sources close to the talks said on Tuesday.

Last week both sides said they were on the verge of announcing an agreement.

But a source close to the talks said ahead of Tuesday's meeting that the interior ministry dispute had become a "real obstacle" to a final deal.

Under the agreement reached in Mecca, Saudi Arabia, last month, Hamas will choose who serves as interior minister but Abbas has a veto.

So far, Abbas has rejected several of Hamas's candidates for the post and Hamas has balked at 12 names proposed by Abbas.

Haniyeh is expected to give Abbas a new list of names on Tuesday, but it is unclear whether he will accept any of them, officials said.

"Interior minister is still a problem," Tayyeb Abdel-Rahim, an aide to Abbas, told reporters in Ramallah.

If Abbas rejects the new Hamas candidates, it will take Hamas time to draw up another list, a Hamas source said.

"It will be up to the president. Hamas wants to end this task as soon as possible," the source told Reuters.

The other key cabinet positions, including finance and foreign ministers, have been settled.

Israel has vowed to boycott the Palestinian unity government, including non-Hamas ministers, unless it recognises Israel, renounces violence and accepts interim peace deals as demanded by the Quartet of Middle East mediators.

The unity government agreement contains a vague promise to "respect" previous Israeli-Palestinian pacts. But it does not commit the incoming government to abide by those pacts, nor to recognize Israel and renounce violence as demanded by Quartet partners the United States, the European Union, the United Nations and Russia.

Haniyeh said after Friday prayers the unity government could be unveiled as early as Monday or Tuesday. Abbas said on Thursday the unity government was "99 percent" agreed.