Fayyad's decision was meant as a confidence-building measure, ahead of the resumption of Palestinian reconciliation talks on Tuesday in Cairo. Negotiators from Hamas and Abbas' Fatah movement are trying to form a transition government that is to prepare for presidential and legislative elections by January 2010.
Abbas said Saturday that he hoped a transition government could be formed by the end of March, suggesting that power-sharing talks have moved into high gear, following failed attempts in the past.
Fayyad's resignation "comes to enhance and support the national dialogue to reach a national unity government," Abbas said.
Fayyad, 57, said he would step down after the formation of a new government, but no later than the end of March. However, Abbas aide Nabil Abu Rdeneh suggested that Abbas could reappoint Fayyad if power-sharing talks fail.
Hamas seemed dismissive Saturday, arguing that the Fayyad government had been unconstitutional from the start.
"This government did not work for the sake of the Palestinians, it worked for its own agenda. This end was expected for a government that was illegal and unconstitutional," said Fawzi Barhoum, a Hamas spokesman in Gaza.
Fayyad, a respected economist and a political independent, had won widespread international support as prime minister. He carried out government reforms, including making government spending more transparent and deploying Palestinian security forces in former militant strongholds in the West Bank.
The support for the U.S.-educated Fayyad translated into massive amounts of foreign aid for the Palestinians. In 2007, donor countries pledged $7.7 billion over three years for the Fayyad government. Last week, another pledging conference, convened in the wake of Israel's Gaza offensive, yielded $5.2 billion over two years.
It was not immediately clear whether the pledges would be affected by a change in the Palestinian government. Donors had said at the pledging conference that much of the aid would be funneled through the Fayyad government.
Fayyad said in a statement on Saturday that he was hoping to pave the way for a unity government. "This step comes in the efforts to form a national conciliation government," Fayyad said.
Hamas officials, meanwhile, suggested that in the event of a power-sharing deal, elections could be put off for several months, beyond January 2010, as the two sides try to improve their standing with voters. The officials spoke on condition of anonymity because the proposal is informal and hasn't been raised in unity talks yes.
The political split between Abbas and Hamas broke out into the open in January 2006 when Hamas won parliament elections, defeating Fatah which had dominated Palestinian politics for decades. Arab mediators repeatedly attempted to bridge the gaps, but failed, and Hamas seized power by force in Gaza in 2007. In response, Abbas fired Prime Minister Ismail Haniyeh of Hamas and replaced him with Fayyad, while Israel and Egypt responded by closing Gaza's borders.
