"I categorically deny that president Abbas has rejected any of the candidates put forward by Hamas, including Mohammed Shubair," Palestinian Authority spokesman Nabil Abu Rudeina told AFP.

Quoting "informed sources", a website close to Hamas earlier reported that Abbas was opposed to Shubair after the United States, Israel and "certain Arab parties" rejected the independent academic as "too close" to the Islamists.

Abbas made his position clear to Prime Minister Ismail Haniya, head of the current Hamas government, during talks in Gaza City late on Thursday, the Palestinian Information Centre said.

The 60-year-old Shubair, a clinical biologist and former president of the Islamic University in Gaza City, is considered close to Hamas but never joined the party that thrashed Abbas's secular Fatah party in a January election.

Harangued by journalists while leaving a Gaza City mosque following the main weekly Muslim prayers, Haniya refused to comment, other than calling his talks with Abbas late Thursday "good and positive".

"The joint Hamas-Fatah committee will meet again today to continue consultations on the unity government," the premier added.

One Palestinian official who refused to give his name, however, earlier called Thursday's talks between Abbas and Haniya "unsuccessful".

Sources quoted by the Palestinian Information Centre accused Fatah elements of trying to use "all means" to "sabotage" efforts to form a unity government.

Palestinians are trying to form a unity administration to end a crippling Western aid freeze imposed after the Hamas-led government took power in March refusing to renounce violence or recognize Israel and past peace deals.

Earlier Israeli Prime Minister Ehud Olmert has said he is opposed to a large Gaza offensive in retaliation for Palestinian rocket attacks, which nearly five months of operations have already failed to stop.

"We should remember that this is not a war with a 'quick fix' solution," Olmert told reporters on his way home from the United States.

"Those who repeatedly mention 'Defensive Shield' (a huge 2002 operation in the West Bank) as an example, and demand that a similar operation be carried out in the Gaza Strip, must remember that terrorism has never ended, and terrorism continues in the West Bank to this day," he added.