Egypt decided on Saturday to delay Palestinian reconciliation talks it planned to host next week, an Egyptian source said, after a new dispute arose between Hamas and Fatah.

Egypt's decision was made after Hamas threatened to boycott Monday's planned talks intended to end the Palestinian Islamist group's factional conflict with president Mahmoud Abbas's Fatah organisation.

Hamas officials in Cairo blamed Abbas's failure to free jailed Hamas members and sympathisers. 'Egypt decided to delay the Palestinian dialogue meetings,'an Egyptian source told Reuters in Cairo.

Postponement of the talks coincided with a statement by Hamas's leader, Khaled Meshaal, that his group is ready to talk to Barack Obama as long as the US president-elect respects Hamas' 'rights and options'.

In a visit to Israel in July, Obama played down the chances of negotiating with Hamas unless the group renounced violence and recognised Israel's right to exist. Under outgoing US president George Bush, Washington refused to talk to Hamas.

'We are ready for dialogue with President Obama and with the new American administration with an open mind, on the basis that the American administration respects our rights and our options,' Meshaal said in an interview with Sky News website from the Syrian capital Damascus.

A statement published by Egypt's Mena news agency said Monday's planned talks involving Hamas and Fatah would be postponed 'until the necessary and proper conditions are achieved to secure its success.'

Egypt had invited Hamas and Fatah and smaller Palestinian factions to talks to try to heal a rivalry that burst into open conflict when Hamas violently seized control of Gaza last year.

Hamas was angered further when Abbas embarked on peace talks with Israel, the Jewish state Hamas refuses to recognise.

Palestinian sources in Damascus and Hamas officials in Egypt said Hamas, Islamic Jihad, the Popular Front for the Liberation of Palestine-General Command and Al-Saeqa - groups opposed to Abbas - would boycott the planned Cairo talks.

'These groups, along with Hamas, do not want to go to Cairo and sit among Arab foreign ministers, who will try to pressure them into signing a pro-Abbas formula,' a Palestinian source in Syria told Reuters.

Hamas officials in Cairo said the group objected to sitting down with Fatah if Abbas failed to free some 400 Hamas members and sympathisers he had jailed with Western and Israeli backing.

'We told Cairo we would go to the dialogue if political prisoners were released if the prisoners were not released we would not come,' Hamas official Ayman Taha told Reuters.

Hamas spokesman Fawzi Barhoum said from Gaza that Abbas 'has placed the last nail in the coffin of the Palestinian dialogue and therefore the dialogue has become useless.'

In response, Fatah official Osama Al-Fara, a delegate to the Cairo talks, said:'Hamas's absence will never serve the Palestinian people especially in a time where we need most for unity and an end to the divisions. It could inflict political and economic harm on the Palestinian people.'

Abbas, who with Israeli and Western backing has beefed up forces in West Bank cities, has arrested Palestinian militants in what he calls a move to restore law and order.

Abbas insisted at a news conference with visiting US Secretary of State Condoleezza Rice on Friday in the West Bank that he held no 'political prisoners.'-Reuters