(Adds statement, Hamas officials' comments paragraphs 8-9, 14) By Khaled Yacoub Oweis DAMASCUS, Jan 21 (Reuters) - Palestinian President Mahmoud Abbas and Hamas leader Khaled Meshaal failed to agree on a unity government on Sunday but said talks would continue and halting bloodshed between Palestinians was their priority. Speaking after more three hours of talks in the Syrian capital, Abbas told reporters their meeting had been "fruitful". "We agreed that the utmost priority is that there should be no spilling of Palestinian blood," he said. A power struggle between Hamas, which won Palestinian elections last year, and Abbas's long-dominant Fatah faction has led to violence in Gaza and the West Bank after efforts to form a unity government broke down and Abbas called for elections. "We will continue our meetings and dialogue in the near future to reach an agreement that ends the siege on the Palestinian people," Abbas said. A statement read to reporters said the talks on a unity government would continue in two weeks. Islamist Hamas has struggled to govern under the weight of U.S.-led sanctions imposed because of its refusal to recognise Israel, renounce violence and abide by interim peace deals. Abbas hopes a unity government will get sanctions lifted although Hamas has resisted some of his conditions. Meshaal said there were "points of disagreement between us but we will sort it through dialogue". MEDIATION A meeting scheduled for late on Saturday had been postponed after officials failed to reconcile differences over a new government and how it would deal with Western demands. On Sunday, Syria's Vice President Farouq al-Shara held separate talks with Abbas and Meshaal in a last-ditch effort to get the two men to meet. "The mere fact that Abbas and Meshaal met is historic and is a boost for the cause of Palestinian unity," senior Hamas official Mohammad Nazzal told Reuters. Before the talks, Hamas officials played down the chances of full agreement, and said the two men would discuss whom to appoint to the ministries of the interior, finance and foreign affairs in a unity government. They also said talks between Abbas aides and Hamas officials in the past few days reached an understanding that Palestinian Prime Minister Ismail Haniyeh would lead the next government. Izzat al-Rishq, another prominent Hamas figure, said the two leaders failed to bridge differences over a programme for the new government. Disagreement centred on whether Hamas would commit to previous PLO peace deals with Israel and a 2002 Arab initiative that offered Israel normal relations in return for full withdrawal from lands it occupied in 1967. Abbas arrived in Damascus on Saturday and met Syrian President Bashar al-Assad, who has close ties with Meshaal and allows the exiled Hamas leadership to live in Syria. (Additional reporting by Wafa Amr in Jerusalem)
