The rival Palestinian factions of Fatah and Hamas ended their two-day talks in the Egyptian capital on Monday without achieving any breakthrough bridging internal splits that have undermined hopes for peace negotiations with Israel, according to officials of both sides.

Hamas has put some fresh conditions which would complicate the situation, said a well-informed Fatah source.

The source said that Hamas wants to apply the same security measures, which would be applied in Gaza, in the Israeli-occupied West Bank.

"Despite the difficulties in the fifth round of Fatah talks that started in Egypt's capital Saturday afternoon, it is possible to resolve the crisis thanks to the Egyptian efforts," senior Fatah official Zakareya El-Agha said after the talks.

Egypt has offered to open the Rafah border crossing continuously if the two factions make a deal.

Rafah border crossing is the sole gateway of Gaza that bypasses Israeli checkpoints.

Meanwhile, Ezzat al-Rasheq, a Damascus-based Hamas leader, said that there are several reasons hindering the parties to reach an agreement, including the attempts of Israel and the United States to block a deal.

The United States and Israel conditioned that dealing with any new Palestinian government headed by Hamas or includes figures of the Islamic movement has to recognize Israel and condemn violence.

Al-Rasheq complained that the inter-Palestinian dialogue, mainly between Hamas and its rival Fatah, "has taken a long time and it goes so slow with procrastination," adding "Hamas is not interested in keeping cooking stones with no benefits."

Al-Rasheq asserted that there are complications and differences between the two sides related to forming the government, security, the system of the upcoming elections and reforming the Palestine Liberation Organization (PLO).

"In order to reach any agreement, the two sides should present and offer mutual steps. I believe that Hamas has been all the time more flexible, but concessions have to be made by both sides," he said.

However, Egyptian mediators stepped up pressure on rival Palestinian groups to form a unity government, setting a July 7 deadline to reach a final agreement between the rival factions.

Egypt has proposed to form a factional committee to be under the command of President Mahmoud Abbas to coordinate between the two leaderships, Hamas government in Gaza and Fatah government in the West Bank.

The proposed committee would not have any international or political mission beyond preparing for elections, rebuilding the security services and supervising the reconstruction of Gaza.

Meanwhile, an impasse overshadowed the reconciliation talks on a range of issues such as establishing a common security force and the elections.

"Hamas and Fatah agreed to form joint security forces in Gaza, which will be in charge of the security service in Gaza until January," Nabil Shaath, a leading Fatah delegate, said in a statement at the end of Sunday's talks.

Furthermore, El-Agha said the proposed role of a committee that would coordinate between Hamas in Gaza and Fatah in the West Bank is another barrier in the reconciliation efforts.

In an expected move, Palestinian President Mahmoud Abbas said he would announce a new expanded government very soon, a well-informed source told Xinhua on Monday.

"The announcement of the expanded government will not exceed two days if it does not happen in the next hours," the source said, speaking on condition of anonymity.

The government, to be headed by the Western-backed Prime Minister Salam Fayyad, will exclude the Hamas movement which won the 2006 parliamentary elections, said the source.

"There is nothing to prevent the declaration of the government," since the Egyptian-hosted fifth-round talks to reconcile Hamas and Abbas' Fatah movement have so far failed to come up with a new unity government, according to the source.

Earlier, Hamas, which controls the Gaza Strip, thought the formation of such a government would sabotage its talks with Fatah on forming a unity government.

Hamas said the new government means announcing the "early death" of the unity dialogue.

The new government had been supposed to be sworn in last week but Fatah delayed it in an attempt to see whether it could reach an agreement on a unity government with Hamas in the Cairo dialogue.

In early March, international donors have pledged a total of 4.481 billion U.S. dollars for rebuilding Gaza in a donors meeting in Egyptian resort of Sharm El-Sheikh.

Since then, Hamas and Abbas' Fatah movement were seeking reconciliation in dialogue to come up with a unity government that would help lifting the siege to allow the reconstruction of Gaza.

But many donor countries refuse to channel their funds via Hamas, insisting that Abbas' Palestinian National Authority (PNA) must supervise the spending.

Hamas beat Fatah in Palestinian parliamentary elections in 2006,but the international community refused to deal with the Islamic movement, which does not recognize Israel.

U.S. President Barack Obama on Monday told visiting Israeli Prime Minister that the United States is committed to a two-state solution to the Israeli-Palestinian conflict, saying he believed it is in the interest of the Palestinians, the Israelis, the United States and the international community.

He also urged Israel to stop Jewish settlement in the occupied territories.

Netanyahu pledged that Israel is ready to reopen peace talks with the Palestinians, but he insisted that Palestinians must recognize the existence of Israel.