Hamas reject Fayyad as Palestinian premier

Hamas' opposition to Salam Fayyad's nomination marked a key setback in the reconciliation process, which aims to form a caretaker government until elections are held next year.

Fatah and Hamas are set to meet this week in Cairo to begin appointing members of the new government.

It was not clear whether Hamas' announcement yesterday was a final decision, or a bargaining tactic as the sides gear up to fill Cabinet posts.

Fayyad, prime minister of the Palestinian Authority, was nominated by the Western-leaning Fatah to remain in his post.