A dispute over control of powerful internal security forces is touching off a critical first challenge for the rival Palestinian factions Hamas and Fatah?s power-sharing agreement, officials said yesterday.

Efforts to implement the agreement brokered in Saudi Arabia ran into trouble Wednesday when Prime Minister Ismail Haniyeh?s Islamic Hamas group presented several conditions for forming the government, said Nimer Hamad, an aide to President Mahmoud Abbas.

With Hamas refusing to resign from the government until Abbas? Fatah movement meets the conditions, the deal could not be finalized.

As a sign of the crisis, Abbas postponed a speech in which he was to detail the agreement. Abbas was scheduled to travel to Gaza later yesterday to meet with Haniyeh to try work out the problems, Hamad said.

The stakes are high for both men. A collapse of the Saudi deal could lead to a resumption of a deadly power struggle, centered in Gaza, that has killed more than 130 people since May, injured hundreds and caused millions of dollars in damage.

Key issues unresolved

The rifts are deep, and Abbas has rejected the Hamas demands in the past. Most problematic for Abbas is likely to be Hamas? insistence that he approve a 5,600-strong militia Hamas set up last year over the president?s objections.

Hamas also wants Abbas to lift his objections to the appointment of dozens of Hamas loyalists to senior civil service positions, and to commit to a candidate for the key post of interior minister, the top security job.

Hamas proposed two candidates, but Abbas has said he wants to review more applicants.The two factions are also at odds over other Cabinet appointments. Hamas says Fatah can?t fill any of the remaining five Cabinet positions that are to be staffed by independent candidates, while Fatah says it can fill one.

All these last-minute Hamas demands have led Abbas to postpone his speech, Hamad said. ?He found it difficult to address people while there are difficulties on the road to implementing the agreement,? he said.

A Hamas government spokesman, Ghazi Hamad, said he was hopeful the two leaders could resolve the issues. Last week?s power-sharing deal, brokered in the Muslim holy city of Mecca, cleared the way for the formation of a Hamas-Fatah coalition. However, the agreement left many key issues unresolved, such as the fate of the Hamas militia.