The ruling Palestinian faction Fatah has agreed to an Egyptian proposal to create a new government that would be acceptable to the international community, a senior Fatah official said yesterday.

The announcement by Palestinian President Mahmoud Abbas? Fatah came two weeks before members of their rival, Hamas, boycotted by the international community, travel to Cairo to discuss the Egyptian mediated plan. ?The proposal is for forming a new government with people accepted by all the organizations, and also by the Arabs and internationally,? Abbas adviser Nabil Shaath told reporters after meeting Egyptian intelligence chief Omar Suleiman.

Shaath voiced hope the new government would lift the Israeli-led blockade of Gaza and would unite bitter rivals from the two factions within Palestinian security services and reform Palestinian bureaucracy. ?The Arabs through Egypt and through some sort of security presence will be able to monitor and guarantee implementation,? Shaath said.

Shaath said he ?absolutely? welcomed a recommendation last month by Egyptian Foreign Minister Ahmed Abul Gheit to put Arab forces in Gaza if Palestinian factions agreed, but said Israel and Hamas would not agree to it.

?Hamas is against an Arab army, but a sizable group of experts (overseeing security reforms) might be acceptable, as much as Israel allows,? he said. Shaath also said parliamentary and presidential elections would take place only after a restructuring of Palestinian civil and security institutions.