Jerusalem (CNSNews.com) - A deal to reunite rival Palestinian factions Fatah and Hamas seemed to be unraveling on Monday before it ever got off the ground.

An Israel official said any deal between the two factions would bring an end to U.S.-sponsored Israeli-Palestinian peace talks.

Hamas, which rules the Gaza Strip, and Fatah, which is allied with Palestinian Authority Chairman Mahmoud Abbas and rules the West Bank, signed a deal in the Yemeni capital of Sanaa on Sunday aimed at reviving direct talks between the two groups.

The two sides agreed to the so-called Yemeni initiative "as a framework to resume dialogue between the two movements to return to the Palestinian situation to what it was before the Gaza incidents." The agreement also affirmed the "unity of the Palestinian people, territory and authority."

Talks were supposed to begin during the first week of April, press reports said.

Fatah severed ties with Hamas after the Islamic fundamentalist group's violent takeover of the Gaza Strip last June.

Israel and the U.S. seized on the breach to promote talks with Abbas, who was pitched as a "moderate" force among Palestinians.

Israeli Prime Minister Ehud Olmert's office declined to comment on the reported Hamas-Fatah agreement. But an Israeli government official who spoke on condition of anonymity said the P.A. would have to make a choice.

"Abu Mazen [Abbas] has to decide between dialogue with Israel and [collaboration] with Hamas," said the official. "He can't have it both ways."

Asked about the agreement before he left Israel on Monday, Vice President Dick Cheney said he understood from talking to Palestinian Authority leaders that they had established "some pre-condition before they would even consider a reconciliation." That includes a "complete reversal of Hamas' takeover of Gaza."

But the deal seemed to be in trouble almost immediately. Hamas and Fatah quarreled over the meaning of the agreement within hours of signing it, the Al-Jazeera Web site reported.

On Monday, an official Hamas Web site reported that Abbas fell out with his own Fatah negotiator over the deal, saying the negotiator lacked the authority to sign deal without first running it by Abbas, said expert Jonathan Fighel from the International Policy Institute on Counter-Terrorism in Herzliya, Israel.

This brings the two sides back to "square one," where the core of their dispute is still the Hamas takeover of the Gaza Strip, Fighel told Cybercast News Service.

Abbas is still demanding that Hamas retreat from its coup in the Gaza Strip, and that is totally unacceptable to Hamas, he said.

But according to Fighel, that does not mean that Israel and the Palestinians can reach a peace agreement before the end of President Bush's term in office.

"It's not an achievable goal," said Fighel. "It's wishful thinking. It's totally unrealistic."

Both sides have committed themselves to reaching a final peace deal but talks have barely gotten off the ground and both parties have expressed their doubts about the possibility of achieving such an agreement.

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