Palestinian President Mahmoud Abbas said Wednesday his efforts to reach a power-sharing agreement with the militant group Hamas have collapsed, raising concerns that a deadlock will lead to more factional fighting after deadly weekend clashes.

But the Palestinian leader received a boost from U.S. Secretary of State Condoleezza Rice, who promised the U.S. would do more to alleviate the plight of the Palestinians.

"I told the president (Abbas) that we are very concerned, of course, about the humanitarian conditions in the Palestinian territories," she said. "I said to him that we would redouble our efforts to improve the conditions for the Palestinian people."

However, she gave few specifics on what steps the U.S. is prepared to take.

Visit FOXNews.com's Mideast Center for more in-depth coverage.

Rice was in the region to try bolster the moderate Abbas and revive a moribund peace efforts. She was meeting Israeli Prime Minister Ehud Olmert later Wednesday.

Conditions in the West Bank and Gaza have rapidly deteriorated since Hamas defeated Abbas' Fatah Party in January elections and Western countries cut off funds to the Palestinian government.

Despite the sanctions, Hamas has refused to accept international demands that it renounce violence, recognize Israel and accept previous Israeli-Palestinian peace agreements.

Abbas, who was elected separately in a presidential vote last year, has been trying to broaden and moderate the government to make it acceptable to the international community. But after Hamas and Abbas announced a tentative coalition deal last month, Abbas said Wednesday that the talks have broken down.

"There is no dialogue now," Abbas said at a news conference with the Bahraini foreign minister. He said the coalition deal "is over now, and we have to start from square one."

The negotiations have foundered over Hamas' refusal to recognize Israel, even implicitly. The tensions spilled over into Hamas-Fatah violence this week, with 10 people killed and more than 100 wounded. The fighting heightened fears of civil war.

Abbas holds wide-ranging powers that include the authority to disband the government. But Abbas has historically avoided confrontation, and he signaled that talks with Hamas could be renewed at a later date.

Visit FOXNews.com's Mideast Center for more in-depth coverage.

In Gaza, Prime Minister Ismail Haniyeh of Hamas accused Rice of trying to "rearrange" the Middle East to suit American and Israeli interests.

Haniyeh said Hamas considers dialogue "the only way" to solve its disagreements with Abbas and would do everything possible to avoid further violence. "I don't think turning the back on this dialogue can serve the higher interests of the Palestinian people," he said.

Public Works Minister Abdel Rahman Zaidan of Hamas said a compromise proposal gaining support in Hamas is to form a government of technocrats, headed by a prime minister who is not from Hamas.

"There is serious thinking within Hamas to form a national unity government which is composed of professionals, basically, not political faces," Zaidan told The Associated Press. "This government would not be headed by a Hamas leader."

However, it was not clear whether Hamas would agree to have such a government recognize Israel. Palestinian lawmaker Saeb Erekat, an Abbas confidant, said no new government would be able to avoid recognizing Israel. "What matters is the program of the government," he said.

An Abbas confidant, speaking on condition of anonymity because he was not authorized to speak to the media, concurred that a government of professionals would be a way out of the current crisis.

Another person involved in Hamas-Fatah negotiations said the sides are considering a Qatari initiative to establish a Cabinet with members from various Palestinian factions, heading by an independent prime minister.

The negotiator, who declined to be identified because the talks are ongoing, said the plan already has been presented to Abbas and Hamas' top leader, Khaled Mashaal, who lives in exile in Syria. Qatar's foreign minister is expected in Syria this week to meet with Mashaal.

Rice reiterated at her news conference with Abbas that a Palestinian government must accept the international conditions. But in the meantime, she said the U.S. is ready to step up efforts to improve the humanitarian situation for the Palestinians and bolster Abbas.

The situation is especially dire in Gaza, which has been hurt by Israeli closures of key border crossings and an Israeli military offensive launched after Palestinian militants captured an Israeli soldier in June. The closures have led to shortages of basic food items and prevented Gazans from traveling to neighboring Egypt.

Rice, who personally brokered an agreement last November to turn over control of Gaza's main crossings to the Palestinians, said she was committed to reviving the arrangement.

"We need to work on those issues. Those are the kind of on-the-ground things that make it easier for the Palestinian people," Rice said.

Rice also said she hopes it "will not be very long" before Abbas meets with Olmert, though conditions do not yet appear ripe.

The Palestinians want a detailed agenda for the meeting, and guarantees from Israel that it will yield results. Preparatory meetings between Abbas and Olmert aides have so far been unproductive.

Olmert has said there can be no progress on the diplomatic front until the Israeli soldier captured in June, Cpl. Gilad Shalit, is freed. Shalit was captured on June 25 by militants linked to Hamas.