Hamas cancelled a planned reconciliation meeting with rival Palestinian faction Fatah over the weekend over the recently accounted direct Mideast peace talks, the Palestinian Ma'an news agency reported on Sunday.
The meeting was meant to be another attempt at ending divisions going back to the militant Hamas group's violent takeover of the Gaza Strip in June 2007, which left the more moderate Fatah movement in charge only of the West Bank.
According to the Sunday report, the meeting, which was to take place Saturday evening, was indefinitely postponed with Hamas official Salah Bardawil telling Ma'an that Fatah had "made it too difficult" for the meeting to take place.
Last week, Palestinians officials estimated that a recent failure by some Arab states to hand over promised donations to the Palestinian Authority was prompted by an attempt to Fatah and Hamas toward reconciliation.
Palestinian Finance Ministry figures showed the PA had so far received $583.5 million in budget support in 2010. Only 22% came from Arab donors, the rest came from international donors including the European Union and the United States.
Aid is crucial in helping pay the wages of 148,000 PA employees, including 67,000 in the Gaza Strip, whose salaries help support the Gazan economy that has withered since Hamas rose to power there in 2007.
Palestinian policymakers say donor support has been one of the main engines of strong economic growth in the West Bank, a figure estimated as having reached 8% this year.
Palestinian Prime Minister Salam Fayyad, midway through a two-year plan to build the institutions of a future Palestinian state, warned recently of "serious financial difficulty" and said the PA faced "a significant shortfall in external assistance."
Ma'an also reported that the EU-denied aid to the Palestinians is linked to negotiations with Israel, quoting the head of operations at the Office of the EU Representative in Jerusalem, Roy Dickenson.
However he categorically rejected accusations that donor countries were withholding assistance as the international community pushes for a return to direct peace talks.