Palestinian President Mahmoud Abbas plans to ask his prime minister within the coming week to form a new government without the Gaza Strip's Hamas rulers, signaling a breakdown in unity talks with the Islamic militant group.

Months of power-sharing talks between Abbas' Fatah movement and Hamas have gone nowhere. "If they continue like this, it could last for years," aide Yasser Abed Rabbo said.

Formation of a new government enjoys "external support," he added, referring to Egypt, which has mediated the floundering power-sharing talks. There was no immediate comment from Egyptian officials.

Abed Rabbo said the next round of Egyptian-brokered contacts would take place on May 16 as planned. But Hamas shared his pessimism regarding their outcome.

"This announcement sabotages the Palestinian unity talks, it's a big blow to the Egyptian efforts and proves Fatah isn't sincerely interested in achieving unity," said Mushir al-Masri, a Hamas politician in Gaza.

The Palestinians have had two rival governments since Hamas violently seized control of Gaza from Abbas' forces in June 2007. Abbas has ruled from his West Bank stronghold since then.

Abbas' prime minister, Salam Fayyad, stepped down in March to clear the way for the latest round of unity talks. Fayyad will head the new government, Abed Rabbo said.

The sides remain deadlocked over Fatah's insistence that Hamas yield to international demands to recognize Israel, renounce violence and accept existing agreements between Israel and the Palestinians.

Mahmoud Ramahi, a Hamas official in the West Bank, said his movement could not accept these demands "under any condition."

While efforts to reconcile the Palestinians sputtered, Israeli Prime Minister Benjamin Netanyahu announced the appointment of a committee to examine ways to help rally the West Bank's economy.

The committee is part of Netanyahu's vision of "economic peace" with the Palestinians. Netanyahu has said the Palestinians aren't ready to govern themselves and has so far resisted international pressure to endorse the concept of Palestinian independence. He wants to focus instead on bringing greater prosperity to the West Bank to lay the groundwork for future peace efforts.

He is to head the five-member panel, which will also include Defense Minister Ehud Barak and Foreign Minister Avigdor Lieberman.

As defense minister over the last two years, Barak resisted international pressure to lift a significant number of the hundreds of Israeli military roadblocks throughout the West Bank. The roadblocks badly impede the movement of people and goods and have been a major factor blocking an economic rally in the West Bank.

Lieberman has repeatedly expressed contempt for the year of U.S.-backed peace talks launched in Annapolis, Maryland, in November 2007 that produced no tangible results.

Meanwhile, an Israeli soldier was shot to death Thursday during a clash in the West Bank, the military said.

The soldier shot while troops were trying to quell rioting in the village of Bir Zeit near Ramallah, it added. The military was investigating his killing and said a number of Palestinian suspects have been arrested. No other details were immediately available.