Palestinian Prime Minister Salam Fayyad warned yesterday that a regional summit backed by President Bush could backfire if it fails to advance prospects of an Israeli-Palestinian peace treaty, with consequences throughout the region.

Mr. Fayyad, a former International Monetary Fund economist who now heads a caretaker Palestinian Cabinet appointed in the wake of Hamas' takeover of the Gaza Strip two months ago, also said one of his government's top priorities is reuniting the West Bank and the Gaza Strip.

He offered little indication of what actions are being taken toward that goal, and left open little room for reconciliation talks with Hamas.

But he listed among the successes of the caretaker government the restoration of international aid, Israel's unfreezing of the customs money, resumption of government salary payments and rebuilding of the Palestinian financial account.

Speaking to foreign correspondents at the Palestinian Cabinet headquarters in Ramallah, Mr. Fayyad said his unelected government could continue to rule until Hamas politicians in the Gaza Strip relinquish power, agree to honor peace agreements with Israel and dismantle militant groups.

The caretaker prime minister confirmed that Palestinian Authority President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert have discussed the outline of a final peace accord, marking a resumption of the first political talks since the early days of the Palestinian uprising in 2001.

For the regional summit to succeed, however, substantial progress must be made on a series of thorny issues such as the borders of a Palestinian state, Jerusalem and refugees.

Fayyad calls on Hamas to restore Gaza 'status quo ante'

"A lot more than a beginning will have to happen between now and then for that meeting to be productive," Mr. Fayyad said.

"I don't want this to be looked at as something that is overambitious. These are issues that have been discussed repeatedly. We've been at it for 14 years. Failure here is not dangerous only to us Palestinians or Israelis. It is a problem for ... the international community."

Mr. Fayyad was made finance minister under the leadership of Yasser Arafat to reform the Palestinian Authority's murky public finance system.

In parliamentary elections last year, he won a seat as an independent, and in March he was drafted into the Hamas-Fatah unity Cabinet into his old portfolio in the hopes of breaking an international aid boycott against Hamas.

Now he is leading a government that is in a bruising challenge with Hamas for legitimacy on the street.

Mr. Fayyad called on Hamas to return the "status quo ante" in the Gaza Strip that existed prior to the Islamic militants' takeover.

"You have to undo what has been done," Mr. Fayyad said.

The Hamas government seized control of Gaza in June and expelled members of the rival Fatah party to the West Bank, where Mr. Abbas set up an interim government.