Hamas and Fatah are slowly edging towards a national reconciliation pact that would end more than five years of rift and division between the two largest political camps in occupied Palestine.

Thanks to strong public pressure, the two groups began consultations to form a mutually accepted government, comprising "independent" ministers. A "reservoir of names" has been suggested to fill various portfolios.

However, it seems the task of forming a government is not going as smoothly as one might hope. Observers in the occupied territories suggest it is difficult to find truly independent and capable figures that would be accepted by both Fatah and Hamas, especially when Palestinians are highly polarised and politicised.

Second, it is uncertain if the Israeli occupation authorities, that have the de facto final say with regard to the formation of any Palestinian Authority (PA) government, will consent to any new political arrangements in the West Bank involving Hamas.

Israel, which views Hamas as a terrorist organisation due to the Islamist liberation movement's refusal to recognise the Israeli occupation of the Palestinian homeland, has been hounding supporters of Hamas ever since the resistance group won general elections held under international observation in 2006.

Moreover, Israeli leaders have vowed to prevent Hamas from taking part in any new elections.

The Israeli threat should be taken seriously as Israel completely controls the West Bank, including areas run by the PA and nominally controlled by the PA security agencies.

Israel also continues to detain dozens of elected Hamas political leaders in open-ended captivity, including many since 2006.

Detainees include Parliament Speaker Aziz Deweik (an American educated professor of urban planning) and some 26 other MPs representing the West Bank. Israeli leaders argue that Hamas has no legitimacy as long as it refuses to recognise Israel. Hamas says Israel has no legitimacy as long as it refuses to recognise a viable Palestinian state.

The PA promised Hamas's leadership it would ask influential world powers to pressure Israel to allow free and unfettered Palestinian elections to take place in the West Bank, including East Jerusalem.

However, it is unlikely that the PA would succeed given the extremist nature of the current Israeli government.

Hamas and Fatah are aware of the Israeli veto over the issue of elections. The two sides reportedly agreed to seek "an alternative mechanism" in case the organisation of elections proved impossible thanks to Israeli objections.

Apart from the elections issue, Hamas and Fatah are still divided over the political process. Fatah, through Palestine Liberation Organisation/PA President Mahmoud Abbas, seems willing to utilise every conceivable opportunity to resume what most observers view as a bankrupt peace process under whose rubric Israel has been expanding its settlement enterprise at a phenomenal rate.

Last week, Abbas implored Israel to release Palestinian prisoners in order to enable the resumption of the peace process.

Abbas's remarks drew negative and angry reactions among most Palestinians, who interpreted them as a de facto abandonment of the erstwhile central Palestinian condition for the resumption of the stalled peace process: namely, a halt to all settlement expansion in the occupied territories.

Abbas said putting an end to settlement expansion was not merely a Palestinian demand. "It is rather an Israeli commitment; we are only asking Israel to honour its own commitment," said Abbas.

Israel denies it has ever made such commitments, insisting it has every right to build in the "fatherland".

Far from halting settlement expansion, the Israel government this week announced plans to build more than 2500 settler units in the West Bank as "compensation" to settlers for a tentative decision by the Israeli High Court to remove five apartment buildings built on private Palestinian land near Ramallah.

Eager to appease settlers, who enjoy strong clout within the government and military establishment, the government said it would transfer the settlers living in the five building to live in mobile homes or fixed structures to be built on nearby Palestinian property. The settlers declined the offer, made by none other than Prime Minister Binyamin Netanyahu, saying they won't accept anything less than 3000 additional settler apartments.

For its part, Hamas views the current peace process as "utterly futile" and that has no chance of succeeding, especially in light of the right-wing extremist trends prevailing in Israel and also the unwillingness -- if not inability -- of the United States and major Western powers to force Israel to end its 45-year-long occupation of the West Bank, Gaza Strip and East Jerusalem.

The reconciliation process between Fatah and Hamas is taking place in less than an idealistic atmosphere. Hamas accuses PA security agencies of continuing to round up members and supporters of Hamas in the West Bank, under the rubric of security coordination with Israel.

This week, the Obama administration announced the appointment of Admiral Paul Bushong as the new security coordinator between Israel and the Palestinian Authority. He is set to replace Air Force Lieutenant General Michael Mueller in that post.

Like his predecessor, Bushong, previously a commander in Guam, will be responsible for beefing up the PA's security infrastructure, overseeing the training of the PA's security forces and security coordination between Israel and PA security.

Hamas strongly denounced the step, calling it "a new measure to suppress the Palestinians" in the West Bank.

Hamas official Fawzi Barhoum said the appointment of Bushong didn't augur well for the cause of Fatah-Hamas reconciliation. "The PA can't claim to be sincere about national reconciliation at a time when it keeps coordinating with Israel against Hamas."

The PA has sought to downplay the Bushong appointment, saying it won't have any practical impact on the Palestinian reconciliation process. One Fatah leader in the West Bank, Ziyad Abu Ein, described Hamas's fears as "highly exaggerated".

Meanwhile, both Hamas and Fatah are awaiting the run-off round of Egypt's presidential elections on 16 June.

Hamas openly supports Mohamed Mursi, the Muslim Brotherhood's candidate, while Fatah at least tacitly supports Mursi's opponent, ex-President Hosni Mubarak's last prime minister, Ahmed Shafik.

A possible win by Mursi would lend Hamas an important psychological victory, as it would consolidate the ascendancy of the Islamic current throughout the Arab region.

On the other hand, a victory by Shafik could embolden Fatah, especially vis-³-vis Hamas, and might even complicate the cause of Palestinian reconciliation.

Both Hamas and Fatah say they don't intervene in the internal affairs of Egypt and that they will work with whomever the Egyptian people elect as their next president.