The rival Fatah and Hamas movements on Monday agreed on a candidate for prime minister of their emerging coalition government, turning to a U.S.-educated professor to end months of infighting and help lift a painful international aid boycott.

The agreement was the strongest sign of progress in the negotiations, which have dragged on for months. But it remained unclear if the new government, which negotiators said could be named within a week, will be acceptable to the West — especially if it keeps balking at the key issue of recognizing Israel.

Both Israel and the United States signaled a willingness Monday to talk to the Palestinian government if it moderates itself, though each said they'll have to see the program of the new government before passing judgment.

The compromise deal to make Mohammed Shabir prime minister was announced in Syria by Moussa Abu Marzouk, a top official in Hamas' exiled leadership. President Mahmoud Abbas of Fatah also supports the nomination, aides said.

Hamas and Fatah are hopeful that the 60-year-old Shabir, a soft-spoken intellectual with a doctorate in microbiology from West Virginia University, will help persuade Israel and the West to lift economic sanctions imposed after the current Hamas-led government took office in March.

The international community says the Palestinian government must renounce violence and recognize Israel's right to exist — conditions that Hamas repeatedly rejected.

Shabir has never voiced his positions on Israel in public, but colleagues describe him as pragmatic. Speaking to Israel's Haaretz daily, Shabir signaled a willingness to deal with Israel, saying he would act "realistically" if he is formally nominated.

Shabir is well-known in the Gaza Strip and has the stature to bridge the differences between Hamas and Abbas' more moderate Fatah. The power struggle between the sides has periodically erupted into violence in recent months.

Shabir served as president of Gaza's Islamic University, a Hamas stronghold, for 15 years before retiring last year. In the high-profile position, Shabir maintained good relations with Hamas.

Many senior Hamas officials worked or taught at the university, including the current prime minister, Ismail Haniyeh, who was Shabir's chief of staff. While believed to be sympathetic to Hamas, Shabir is not known to be a member.

Shabir also enjoys a good relationship with Fatah. When longtime Palestinian leader Yasser Arafat was still alive, Shabir was a frequent visitor. He also maintains contact with Arafat's successor, Abbas.

Hamas officials said Shabir had agreed to accept the post if nominated.

If nominated, Shabir would lead an emerging government of experts — acceptable to the major political parties but independent of them — that Abbas hopes will satisfy the international demands.

Officials say the so-called technocrat government would take a vague position toward Israel and focus on internal Palestinian affairs, while allowing Abbas to pursue peace talks with Israel. Abbas was elected in a separate presidential vote last year.

Both Hamas and Fatah officials have insisted the United States and European Union are ready to end their sanctions after the next government is named.

American and European officials said Monday their positions haven't changed, reiterating their demands that the Palestinian government renounce violence, recognize Israel and accept past peace deals.

But in a possible sign that a deal could be in the works, U.S. diplomats said they have been in close contact with Abbas as he tries to assemble the new government.

"We are interested to hear what he has to say," said Micaela Schweitzer-Bluhm, adding "we're not in any position to approve or disapprove candidates." She said the U.S. will take a stance on the next government once it sees the platform.

In Brussels, a top EU official said the European Union is eager to revive relations with the Palestinians, while stressing any new Palestinian unity government must respect international demands.

"I very much hope that we still can see a government which takes positions which allow us to re-engage," said EU External Relations Commissioner Benita Ferrero-Waldner.

Israeli Prime Minister Ehud Olmert, in an interview published Monday with the Palestinian daily al-Quds, said he would be willing to talk to Hamas if it accepts the conditions presented by the international community.

"The issue is not who is sitting in the government, but what the government says," Olmert's foreign minister, Tzipi Livni, told Israel Radio.

Months of talks between Fatah and Hamas have failed to lead to the establishment of a unity government. In recent days, however, both sides said progress had been made, and Abbas said he hoped a government would be in place by the end of November.

Negotiators said Monday they are close to agreement on two other key appointments.

Respected economist Salam Fayyad is being considered for the post of finance minister, a job he held until the Hamas-led government took office. Fayyad, a former International Monetary Fund official, was credited with fighting mismanagement and cronyism.

The leading candidate for the third key post, foreign minister, is Ziad Abu Amr, an independent lawmaker with ties to both factions, officials close to the talks said. Abu Amr has mediated between Hamas and Fatah in the past. The post is currently being held by a Hamas hard-liner, Mahmoud Zahar.

Palestinian negotiators said Monday they expect an agreement within a week. After that, the rival sides plan to go to Egypt for a signing ceremony, to be attended by Arab dignitaries.

A Hamas official said the group wants the deal to be signed in Egypt to ensure international support for the new government. Egypt, which has good relations with Israel and the United States, has played a key mediating role throughout the negotiations.