Hamas leader looks to strengthen hold on Gaza

Haniyeh's decision to cement Hamas's grip on Gaza opposes Palestinian President Mahmoud Abbas' demand that the Islamist group hand over control of the enclave as delegations from the rival factions meet in Yemen for reconciliation talks.

Hamas Islamists took over Gaza after routing more secular Fatah forces loyal to Abbas in June.

"There are consultations to enlarge the government led by Ismail Haniyeh," the official told Reuters. "The prime minister in Gaza offered some Palestinian figures to participate in the government and they have expressed an initial readiness to participate."

Fatah spokesman Fahmi Zarir said, "This is illegal, this is against the legitimacy of the Palestinian Authority," adding that Haniyeh was "expanding the gap" between the factions.

Hamas defeated Abbas's long-dominant Fatah movement in parliamentary elections in January 2006, spurring the United States and European Union to suspend aid to the Hamas-led government.

In an effort to end the Western boycott, Abbas and Haniyeh agreed to form a unity government in March 2007, but the administration collapsed a few months later amid factional fighting that culminated in Hamas's takeover of Gaza.

Abbas dismissed the Hamas-led government and formed a Western-backed cabinet in the occupied West Bank.

Hamas and Fatah negotiators arrived in Yemen this week to try to end hostilities, but have been unable to reach an agreement.

A main point of contention appears to be Fatah's demand, included in a Yemeni proposal, for Hamas to give up control of Gaza and for Palestinian elections to be held.

The official said Haniyeh's reshuffled government may be presented to the Palestinian legislative council for a vote of confidence, but Fatah has been boycotting such meetings led by Hamas in Gaza and Abbas has called them illegal.