Rival Palestinian factions of Hamas and Fatah started their fourth round of reconciliation talks sponsored by Egypt on Monday in Cairo in a bid to clinch the "last chance" of Palestinian unity.

"The new development is that we have decided on an essential point related to Palestinian Liberation Organization (PLO)," Azzamal-Ahmed, a member of Fatah's delegation, told Xinhua after the talks, adding that "We still need more time."

He also warned that "If we did not reach an agreement about other issues, it will be as if we did not reach an agreement at all."

Earlier in the day, the Fatah delegate has said before the talks that Egypt's proposal to form a national committee coordinating between Fatah and Gaza administrations is considered to be the "last chance."

Comments from Hamas side are unavailable so far because the delegates were not authorized to make statements to the media after the talks.

Before the talks, Ezat al-Rashq, a member of Hamas' delegation, told the local Nile TV that "this round of meeting is a positive sign."

The dialogue, which was initially set to kick off on Sunday, was delayed for one day to complete preparations, Palestinian sources said earlier on Sunday.

Hamas and Fatah have agreed in March on forming a transitional government and holding elections by January 2010 but failed to agree on the government's political platform and the electoral law.

Hamas was scheduled to present its vision which is based on an Egyptian proposal to form a national committee to liaise between Hamas' Gaza administration and the Western-backed government which is based in the West Bank.

Earlier, Hamas officials said they have mended the Egyptian proposal in a way that does not give the Abbas-backed government more authority and influence over Gaza.

Egypt made the proposal to bypass a basic argument between the two groups on forming a unity government with a political platform that is committed to the international requirements, mainly recognition of Israel.

Hamas refuses to join any government that recognizes Israel and previous peace deals and renounces violence.

Palestinian President Mahmoud Abbas also urged in the day Fatah and Hamas conferees in Cairo to overcome their differences to forma unity government.

"I call on Cairo dialogue to agree on forming a government that will run the country's affairs, reunite it and rebuild Gaza, then go to elections," said Abbas in Ramallah, adding that "We cannot rebuild Gaza without this government."

International donors have pledged a total of 4.481 billion U.S. dollars for rebuilding Gaza in a donors meeting in early March, but the United States has expressed doubt that Fatah and Hamas will make a deal this round.

"We will not deal with nor in any way fund a Palestinian government that includes Hamas unless and until Hamas has renounced violence, recognized Israel and agrees to follow the previous obligations of the Palestinian Authority," U.S. Secretary of State Hillary Clinton on Wednesday told the House of Representatives Foreign Affairs Committee.

Abbas pledged to guarantee "honest elections" and that if Hamas wins, he will hand over power to the radical movement "because we believe in democracy."

Abbas added that if elections were not held by Jan. 24, then "there will be no legitimacy to anyone -- not the government, not the parliament and not the president."

However, Mahmoud Zahar, a senior Hamas leader based in Gaza, has hinted Thursday that the movement would extend its term in the Palestinian parliament if no agreement is reached with Fatah in their unity talks.

Meanwhile, the pro-Fatah Palpress news website quoted unnamed sources as saying that "in case Fatah and Hamas leaders fail to agree on forming a unity government, Abbas would ask Fayyad to form a new government that includes all Palestinian factions, including Hamas movement."

As the Cairo talks are still under way, a number of other Palestinian factions, including the Democratic Front for the Liberation of Palestine (DFLP), criticized the fourth round of dialogue only involves Hamas and Fatah.

"This is a bilateral dialogue that will get us back to the zero point," a joint statement by the factions said. "This is a monopolistic dialogue that excludes most of the representatives of the Palestinian people."