GAZA, Nov 2 (Reuters) - Rival Palestinian factions are close to agreeing to form a new government to replace the Hamas-led administration, Palestinian officials said on Thursday, although the shape of that government was not clear. A senior Hamas parliamentarian, Khalil Al-Hayya, said Palestinian President Mahmoud Abbas and Prime Minister Ismail Haniyeh, a senior Hamas leader, were expected to finalise the details shortly. "There is substantial and clear progress," Hayya told Reuters. A deal to form a unity government between Abbas's Fatah faction and Hamas collapsed several weeks ago, deepening a power struggle and raising fears of civil war between the groups. Some Palestinian sources said an agreement could see the formation of a government of "technocrats" without direct affiliation to either faction. Hamas would still be expected to select the prime minister, even if it meant that Haniyeh gave up his post. One Hamas official said he expected Haniyeh to stay on. Hamas has struggled to run the government since it came to power in March after winning elections, because of sanctions imposed by the West against its administration. Hamas is regarded as a terrorist organisation by Israel, the United States and the European Union, which have called on the group to recognise Israel, renounce violence and accept past peace accords if it wants to be accepted.
