Palestinian president Mahmud Abbas will decide how to reform the government of caretaker prime minister Rami Hamdallah in the middle of August, a senior official said on Monday.

"President Abbas will decide on the legal status of the current government on the 14th of the next month," Palestine Liberation Organisation executive committee member Wassel Abu Yusef told AFP.

"The caretaker period will end on August 14 and then president Abbas must either choose someone else to form a government or form it himself," he added.

Abbas accepted the resignation of Hamdallah on June 23 after just over two weeks on the job, plunging his government into crisis.

The Palestinian leader initially had five weeks to find a replacement, officials said, but the date -- which would have ended in late July -- was put back due to the Muslim holy month of Ramadan which started on July 10.

At the heart of the crisis is a dispute over the division of responsibilities within government.

Hamdallah, who was sworn in on June 6, had been incensed by Abbas's decision to appoint two deputies under him in newly created positions, sources in his office said.

It was the second time in 10 weeks that a prime minister had tendered his resignation over a power struggle.

In April, then premier Salam Fayyad tendered his resignation following a power struggle with Abbas over the finance portfolio.

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