Rival Palestinian factions met in Cairo on Tuesday at the start of a marathon effort to forge a national unity government and resolve major disputes between Hamas and Fateh, the two largest groups.

Senior delegations from Hamas and Fateh and smaller factions began work in five reconciliation committees which they agreed to form last month in the Egyptian capital. The talks are expected to last for 10 days.

The meeting began with speeches by Egyptian Foreign Minister Ahmed Aboul Gheit and intelligence chief Omar Suleiman - who has brokered the talks - calling on the factions to work hard towards reconciliation.

But lingering distrust between the Islamist Hamas rulers of Gaza and the Western-backed Fateh threatens to complicate the talks.

"I want to remind you of the consequences... if there were a failure to reach an agreement," Suleiman warned the rival factions.

"You all know the consequences. You have in front of you an opportunity that will not come again." Aboul Gheit warned that the chasm between the factions threatened to sap the readiness of international donors to support the Palestinian cause.

"I have had many moments of desperation when talking to the many countries that have stood by us and said that you and [the Palestinians] are losing out because of the division," he said.

The stakes are high after Israel's devastating 22-day military offensive in Gaza, which ended on January 18 leaving 1,300 Palestinians and 13 Israelis dead.

International donors pledged $4.5 billion for reconstruction aid for the impoverished coastal strip last month.

But many donor countries, backed by Abbas' government, have said they will not deal with Hamas authorities in Gaza.

Western governments have expressed their support for Palestinian President Mahmoud Abbas' proposal for a government of independents and technocrats.

‘Weaken Iran to help peace’

Israeli prime minister-designate Benjamin Netanyahu believes that weakening Iran is key to ending the Middle East conflict as it would in turn weaken Hamas, a senior aide said on Tuesday.

"Iran's growing power and intransigence give great advantage to the radical elements among Palestinians and in Lebanon," the aide said, when asked about talks Netanyahu held with outgoing Defence Minister Ehud Barak earlier in the day.

"Any progress in the Middle East peace talks will require Hamas' weakening which can be achieved only if Iran is seen as weakened," he said.

Israel envoy heads to Cairo

A top Israeli official headed to Cairo on Tuesday for the second time this week to continue "intensive" Egyptian-mediated talks on a prisoner swap with Hamas, a senior official said.

Prime Minister Ehud Olmert's special envoy Ofer Dekel "has been engaged in recent weeks in intensive efforts" to secure the release of Israeli soldier Gilad Shalit who was captured by Palestinian fighters in a cross-border raid in June 2006, the official told AFP on condition of anonymity.

Dekel, a former deputy head of Israel's Shin Beth domestic security service, met Egyptian intelligence chief and mediator Omar Suleiman on Sunday and later returned to Israel, an Egyptian official said.

He returned to Cairo on Tuesday to continue the talks, the Israeli official said.

The protracted indirect talks between Israel and the Islamist rulers of the Gaza Strip appeared to have gained momentum in the wake of Israel's devastating 22-day Gaza offensive that ended in January.

According to the official, the sides continue to disagree over just under half of the 450 Palestinian prisoners held for attacks against Israelis that Hamas wants freed in exchange for Shalit.

In total Hamas has demanded the release of nearly 1,500 of the roughly 11,000 Palestinian prisoners held in Israeli jails, a senior Israeli official has said.

Hamas has said it is close to agreeing an 18-month truce with Israel in and around Gaza but the Egyptian-brokered talks have stalled since Israeli Prime Minister Ehud Olmert made a deal conditional on Shalit's return.

Israel has said it will not reopen border crossings into the Gaza Strip, which it has kept largely sealed since Hamas seized the enclave in June 2007, until Shalit is released.

Galloway donation

Firebrand British MP George Galloway on Tuesday donated thousands of dollars and dozens of vehicles to the Hamas-run government in the Gaza Strip after arriving in an aid convoy.

"We are giving you now 100 vehicles and all of their contents, and we make no apology for what I am about to say. We are giving them to the elected government of Palestine," Galloway said at a press conference in Gaza City.

Galloway said he personally would be donating three cars and 25,000 pounds ($35,000) to Hamas Prime Minister Ismail Haniyeh as he dared the West to try to prosecute him for aiding what it considers a terror group.