Palestinian President Mahmoud Abbas says he will act to form a new government in the Israeli-occupied West Bank and the Gaza Strip.
Speaking in Ramallah at a meal marking the end of the daily Ramadan fast, Mr. Abbas said he will make key decisions to ease the suffering of the Palestinian people.
In talks with the ruling Hamas group, Mr. Abbas has failed to form a unity government. Talks broke down over the militant group's refusal to recognize Israel and renounce violence. The U.S. and Europe suspended aid payments to the Palestinian Authority after Hamas took power in the Palestinian territories.
Mr. Abbas has suggested he might form a government of technocrats. Hamas has rejected this idea.
Earlier Thursday, an Israeli official, Infrastructure Minister Binyamin Ben Eliezer, told reporters in Cairo that Hamas sabotaged a prisoner exchange agreement. The minister said exiled Hamas chief Khaled Mashaal vetoed the pact at the last minute.
But a Hamas official, also in Cairo, blamed the failure on Israel.
Palestinian Interior Minister Said Siyam said Israel is refusing to guarantee the release of Palestinian prisoners in exchange for an Israeli soldier.
Egypt has been mediating between Israel and Hamas for months.
In other news, a senior Lebanese official says the Arabs should resume peace talks with Israel.
Parliament Speaker Nabih Berri told Arab television station Al-Arabiya that peace talks should be based on a Saudi initiative that calls for Israel to relinquish occupied lands for peace.
Berri is a Shi'ite ally of Hezbollah. Earlier this week, Israeli Prime Minister Ehud Olmert proposed peace talks with Lebanon. But Lebanese Prime Minister Fuad Siniora said his country would be the last one to sign a peace deal with the Jewish state.
Palestinian militants in the Gaza Strip kidnapped the Israeli soldier in June.
Some information for this report provided by Reuters and AFP.