At a meeting with journalists in Ramallah last week, Palestinian Authority Prime Minister Salaam Fayad complained that while Hamas and Fatah have agreed to halt the "propaganda campaign" against each other, to pave the way for the establishment of a unity government, the two parties have yet to stop their criticism of him. Fayad, whose resignation goes into effect at the end of the month, also made it clear that his decision to quit was final, and that he was not seeking a new post in a future government. Fayad's dismay with Hamas and Fatah is understandable, given the fact that both parties had long been pressuring PA President Mahmoud Abbas, to get rid of him. The anti-Fayad campaign escalated almost immediately after Operation Cast Lead, when many countries promised the Palestinians billions of dollars to help rebuild the Gaza Strip. Fatah and Hamas leaders became worried that most of the financial aid would be channeled to a Fayad-led government that would alone decide how and where the money should be spent. Fayad, who ran in the January 2006 legislative election as head of the Third Way list, is not a member of Hamas or Fatah. This is exactly why the two parties viewed him as an "outsider" who is more popular in Washington and European capitals than he is in the Palestinian territories. Fayad's opponents accused him of placing the interests of Israel and the US above those of his own people. Their main goal, ever since Fayad was appointed prime minister two years ago, was to undermine his credibility by depicting him as a pawn in the hands of the Israelis and the Americans. As Fayad prepares to leave his post, Hamas and Fatah have launched intensive negotiations in Cairo to see how each could benefit from the funds promised by the international community. Because of his determination to implement financial and administrative reforms in the PA, Fayad was seen by Hamas and Fatah as a major threat to their standing. ACCOUNTABILITY, COMPETENCE and good government do not exist in the lexicons of Hamas and Fatah. In the past two years, Fayad succeeded - to a certain degree - in bringing about some positive changes, especially with regard to reconstructing the PA security forces and restoring law and order to communities in the West Bank. But by maintaining a tight grip on the government's budget and refusing to succumb to massive pressure from Hamas and Fatah to give them a share of the pie, Fayad earned many enemies in the West Bank and Gaza. Not surprisingly, most of the verbal attacks on Fayad came from Abbas's top aides, senior Fatah operatives and disgruntled members of Fatah's numerous militias and armed gangs. They had good reason to be angry: Fayad had denied them direct access to the budget. Unlike many Hamas and Fatah leaders, Fayad does not enjoy grassroots support. In the eyes of most Palestinians, he's a relatively new player in the local arena. Besides, he's a man who was never part of the "revolution"; he never spent time in an Israeli prison; his children were never wounded or killed in clashes with IDF troops; and his home was never demolished. As such, in their view, Fayad lacks the credentials required to make a popular leader. FOR THE past two weeks, Hamas and Fatah representatives have been trying to hammer out an agreement over a unity government that would have exclusive control over the financial aid. With the help of the Egyptians, the two sides are hoping to convince the Americans, the Europeans and some Arabs to channel the funds to a new unity government, whose main task would be to rebuild Gaza. At this stage, it's hard to see how any of the donor countries would trust Hamas or Fatah with such an important mission. On the other hand, the departure of Fayad makes it impossible for the donors to deal in the future with anyone other than the leaders of the two parties. Although Hamas and Fatah have yet to reach agreement over the makeup and political program of the proposed unity government, the two sides have more than one reason to be optimistic over the attitude of the international community, specifically the Europeans. In recent weeks there have been increased reports about public and secret meetings between Hamas representatives and European diplomats, politicians and lawmakers. Mushir al-Masri, a Hamas legislator and spokesman from Gaza, confirmed this week that a number of unnamed European governments have begun talking to Hamas. These meetings legitimize Hamas, and add to its credibility among the Palestinians. Hamas's growing popularity, as indicated by recent public opinion polls, shows that a majority of Palestinians prefer its radical ideology to Fayad's financial, security and administrative reforms. Alarmed by Hamas's rising popularity, some Fatah officials are trying to be "more Hamas than Hamas" by escalating their anti-Israel rhetoric. This is what happened this week with Muhammad Dahlan, the former US-backed Fatah security chief, who has popped up again in Ramallah as a close confidant of Abbas's. Ever since the Hamas takeover of the Strip, Dahlan and several other Fatah leaders have kept a low profile, spending much of their time doing business in Egypt. In an interview on Palestine TV, Dahlan declared that, contrary to the widely believed claim, his Fatah faction had never recognized Israel's right to exist. He also urged Hamas not to give up and recognize the Jewish state. DAHLAN'S ABRUPT comeback, which coincided with Fayad's resignation announcement, is seen by some in Ramallah as an indication of his desire to assume a top post in a new government. Some have even gone as far as suggesting that he is actually seeking to replace Fayad or succeed Abbas. But his return is likely to sabotage efforts to achieve reconciliation between Fatah and Hamas. As far as Hamas is concerned, Dahlan is a "CIA agent" who tried, unsuccessfully, to undermine its regime after the movement won the January 2006 parliamentary election. Hamas also does not want to see Fayad playing any role, both because of his alleged responsibility for the ongoing massive crackdown on Hamas supporters and members in the West Bank, and because of his close and warm relations with the Americans. In the event that the reconciliation talks in Cairo fail, Abbas will have no other choice but to go back to Fayad and literally beg him to withdraw his resignation. Abbas, who was not on good terms with his outgoing prime minister, knows that he will have to swallow the bitter pill if he wants to see US and EU money flowing again into his government's coffers.